this sounds for me like a problem caused by swapping. Your memory might be too small and Windows starts to page memory to disk. If you try to copy paged memory this result in very high disk utilization and therefore in a very slow copying of the data.
You can check this with the Performance Monitor that ships with Windows XP. Go to Start -> Run and type in "perfmon" and hit ok. The Counter pages/s is important. If this value goes up by bigger numbers while copying, at least a part of your copied memory are coming from disk or is stored at disk.