Hi there all!
This problem I'm having also occured under Windows Xp 32-bit. It's been pestering me since forever! Here's the issue:
I have several HDDs installed in my system. They have been of various brandnames and sizes, constantly upgraded in time, changed HDDs with others and so on. So it really doesn't matter which HDds I currently have, but I'll tell anyway. The OS HDD is a Samsung SpinPoint 1612, ATA 133, 160 GB. The second HDD is a Samsung SpinPoint SATAII, 160 GB and I have an external USB2.0 HDD which is a 40 GB Maxtor, mainly used for data transfer.
Whenever I copy a large file from one partition to another or from a HDD to another, the OS slows down more and more, until it comes to a point where I cannot do anything, the HDDs crunch data like crazy and I wait literally minutes to even swith from a window to another or to pop out the Start menu. The transfer speed (checked with Total Commander) drops to a petty 700-800 KB/s and the HDDs crunch and crunch and crunch... paradoxically, if I limit the transfer speed (with Total Commander) to 16 MB/s, the copying goes just fine. The transfer rate caps at 16MB/s and I can work with the OS.
I've installed Sysinternals' Process Explorer to check what exactly is transferring data but got no clue. Sometimes, the OS HDD starts working, it crunches data and Process Explorer tells me there's no disk activity
Indexing Service is disabled, System Restore is disabled, and I noticed the cache size increases to huge amounts during large file copying. Apparently, Windows moves runing software data from memory to swap to make room for the files I'm copying, which, I'd like to say, is the dumbest thing I've ever seen. The question is, how do I stop Windows from doing that (except from installing Linux, of course, which works just fine BTW)?
Thank you in advance!

How much RAM have you got in your pc?

Oh, forgot to mention, 1024 MB (2x512 MB). Dual-Channel DDR 500, set at 400 MHz with tighter timings.

If you really are getting to the point where the HDD activity is slowing your system to a complete crawl, you can gather a complete memory dump from the box while it's hanging and I can likely tell you where the problem lies (this requires a PS/2 keyboard attached):

1. Create or set the following registry value:
Key: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\i8042prt\Parameters
Value: CrashOnCtrlScroll
Type: REG_DWORD
Data: 1

2. Right-Click on the "My Computer" icon on the desktop and select "Properties", then click the "Advanced system settings" option in the left-hand pane of the window. On the "Advanced" tab, click "Settings" under the "Performance:" header. Click the "Advanced" tab, then click "Change" under "Virtual Memory". Set the pagefile to be located on the partition where the OS is installed, and set it to be equal to Physical RAM + 50 MB.

3. Also in the "System Properties" window on the "Advanced" tab, click the "Settings" buttun under the "Startup and Recovery" header. Make sure "Complete Memory Dump" is selected (see 3a if this is not in the list). You can change the location of the memory dump file to a different local partition if you do not have enough room on the partition where the OS is installed.

3a. If the "Complete Memory Dump" option in step 3 is not available, you will need to manually set this registry value:

Key: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\CrashControl
Value: CrashDumpEnabled
Type: REG_DWORD
Value: 1

4. You will need to reboot for these changes to take effect.

5. The next time that the system is incredibly slow or even appears to be hanging due to the HDD activity, hold down the RIGHT CTRL key and press the SCROLL LOCK key twice to cause the machine to bugcheck and create a memory dump. After the box comes back up, you'll find the resulting memory dump file in %systemroot%\memory.dmp.

Well I did exactly that and the system crashed (unlike it was supposed to, because it crashed from lack of memory before I got to use the shortcut), I found the memory dump but it's gibberish... Is there a dump analyzer I can use? Also, unpleasantly enough, I found that a number of files in %systemdir% got corrupted and I lost some fortunately not important data; had to reinstall Firefox (it was open when the crash occured) and a few other small pieces of software.
Now I have a memory dump I don't know what to do with and some time spent bringing back some programs to life

@war4peace
cluberti didn't ask you to create the memory.dmp file in vain. Archive it and come back with the location where you uploaded it so he can have a look at it. He's the man who can tell you EXACTLY why your pc behaves like that from reading the .dmp file.

Nitroshift is correct - upload it somewhere (or PM me and I'll provide you an upload location) so it can be reviewed with windbg (part of the debugging tools for windows).

Wow, this level of service deserves some cash payment! Or at least a high five

lol

Just checking in - any luck in getting a dump, or tracking this down, war4peace?

Sorry I didn't answer so far, uploading 1 GB somewhere is pretty hard nowadays
I'll come back with a link as soon as possible. ...and thank you guys for being such nice in helping me! I really appreciate it!