with a sp4 install disk, should be ok with large hard drive. I would recommend using the 2k not the XP disk to partition - just the system partition - leave the other for when you're up and running (I know it takes longer as no quick format option, but the small differences between 2k & XP could create a problem).
A 250GB hard drive is generally 250,000,000,000 bytes (ie, GB defined as 1,000,000,000 bytes). Windows usually defines it as 1024x1024x1024 - ie 1,073,741,824 bytes - so you need to divide 250 by 1073741824 to get the size in windows (and the bios usually) - which is 232GB.
Sounds like its basically sorted - 100 seconds to being able to open program is not bad for 2k (not the fastest loading version of windows), though I'm still puzzled why a clean install should have created a problem. It sounds like (one of) those apps has helped - but I would be careful of 'clean-up' apps like those - they can remove the wrong entries and create havoc - though much more unlikely to on a new install.
If you go to the motherboard manufacturer site, they should have a support page with drivers. Find your motherboard and see if there are any chipset (or SATA) drivers available for it. If there are, download and install. They can speed up stuff like disk access time and generally let the machine operate a little more efficiently.