LS120 defintely works on 2k (all versions of windows from 95 - I've got one and have had it running on all).
when you say 'I even have trouble reading 1.44 floppies', you mean using a LS120 drive?
I've had problems with mine - its never been 100% reading 1.44 floppies, and has occasionally failed to read anything. Have renmoved and cleaned it and then retried a number of times - so far its always returned to full functionality (though don't use it much anymore).
Win 2000 has no problem with the LS-120, however your BIOS might have problems with it.
Some BIOSes have the LS-120 available as bootable device, in others you may have to set it as a floptical or some other type of magneto-optical device.
Remember that you will have to have it properly set up as master/slave, on the correct IDE channel.
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