I was trying to replace my studs since they broke off. After hammering the hub i got it off and saw this:

http://i636.photobucket.com/albums/uu81/zfjohnson07/IMG_0572.jpg

http://i636.photobucket.com/albums/uu81/zfjohnson07/IMG_0571.jpg

thats the differential bearing? i'm new to this kind of stff. i'm trying to fix the car and get rid of it, its a pain the in the rear end. so if you could tell me what im looking at and what i need to do to fix this let me know!

You need a new bearing & race. W/ the race in the hub, I'd get a new hub w/bearing. At 1st I thought you had a brake fluild leak, but it couldn't be, looks like bearing grease. Get some brake clean & clean that crud up & clean the spindle too, making sure the spindle isn't messed up. So get new hub w/ bearing & get new studs also.

I agree with the spindle inspection. Either that's rust or it looks burnt.

So get one from autozone the hub assembly kit

So get one from autozone the hub assembly kit

With studs. And make sure the spindle is messed up where the bearing would ride on.

I reccomend
http://www.napaonline.com/Catalog/CatalogItemDetail.aspx?R=NDA4401810BRNG_0325330031
These have the wheel bearing already pressed into the drum and included the studs, which is what you want.

These are what has been on my wifes focus for a couple years now and they seem to be good stuff, probably similar to the autozone ones. Take some fine sand paper and remove the rust from the spindle then make sure you put a little anti-seize around the spindle to keep the wheel bearings from rusting/fusing to them again. Took me a couple hours to hammer the ones off my wifes focus.

It also looks like you have a leaky wheel cylinder, so I would probably replace it anyway
http://www.napaonline.com/Catalog/CatalogItemDetail.aspx?R=UBP370121_0158472469

Along with a new spring kit. This spring kit I got from napa did not come with the little tiny spring attached under the self adjuster that probably isnt needed, but I reused the old spring anyway.
http://www.napaonline.com/Catalog/CatalogItemDetail.aspx?R=UBP3018_0094780168

By no means do you have to go with napa, its just what I use and seems to work well, O-reilys, autozone etc are probably all very similar. Once you are all done, you probably wont have to touch the rear again for a long long time.

^This.

I just did mine last night. I'm very glad that I did.