Computer Boots And Runs Slow As Molasses

I've got an old msi K7N2G-L board/computer and it's got an old WD1200JB installed and running xp. The problem is that it boots and runs slow as molasses, I'm talking like 10 mins to get it to the log in screen and opening apps takes a good 2-3mins before opening too. If I run a defrag on the drive, things temp speed back up to normal, but as soon as I reboot, it's slow again. If I run the defrag again, everything's cool and speeds go back to normal.So I'm guessing that there's some HD corruption on this drive (at least 5yrs old) and it keeps writing system files to the bad sections of this old HD when it's booting. I've run various fdisks, but none of them reveal any errors. (I should mention that I'm diligently proactive on Antivirus', firewall and Spyware practices, so that's definitely not an option relating to the old drive's slowness.) I've scanned with Avira, Nod32, Kaspersky, Trojansuperantispyware, and checked hijack this entries, there's nothing detected or unusual. Of course, I don't have all of these installed at once.I decided to try and swap the drive out and reinstall xp on this system using a newer WD3200 drive (that I use as a storage drive on one of my other computers.) I run the xp installer, successfully quick format the 3200 partition to NTFS, and everything proceeds fine and fast(keep in mind the 3200 drive was used to store data on my newer comp and was already formatted to ntfs.) Unfortunately, after it successfully finishes the initial install, it gives me the 15 second reboot warning. Okay, I let it reboot, but instead of continuing the install after the reboot, the system hangs on "Verifying DMI Pool Data" and that's it. Nothing happens and I am unable to finish the installation. I tried this like 10 times with 2 different XP home's and I keep getting the same problem. When I go into Bios, the drive is recognized as a 3200/automatic settings? I can't see why xp installs fine on the old WD1200, but not on the WD3200.