I am having a similar problem running a WDElements 1TB external on my Windows XP Pro SP1 machine. I thought it was just a bad drive so Newegg is replacing it, but in the interim, I picked up a Seagate Desk 1TB external on sale at Fry's and it too is having trouble with my system. The issue is as follows:
When you plug in the drive, it is recognized, installed, and shows in "My Computer". You can open the drive up create folders, transfer files, everything as normal. That is, until a random period of time later when the drive will just lock up, and windows slows down to a crawl (takes 30-40 seconds to register a mouse click). It almost always happens during a file transfer, and if you hot-unplug the drive's USB, windows returns to normal and you lose whatever data you were transferring. If you leave it plugged in and try to shut down the system, it always locks up, leaving you the reset button as your only recourse.
Once the system is reset, windows will not boot while the drive is connected. Unplug it, the computer boots fine.
Is this some sort of setting or interface that has difficulty with drives over a certain size?
Anyone else experience this issue? Any known fixes?
Thanks in advance for any help you can offer toward resolving this!