I'm really grasping here. Are there performance issues when executing activities that do not involve accessing SQL Server? Loading a Word document for instance?
I'm wondering if something screwy with MDAC installed on the machine. It might be worth uninstalling whatever version is on there and reinstalling MDAC 2.6.
http://support.microsoft.com/support/MDAC/26setupfaq.asp#26setupfaqYou'll have to have a Windows 2000 CD to do the removal.
-Mike