A number of people have posted here about performance issues with their IEEE 1394 (aka 'Firewire') devices, after upgrading a Windows XP system to SP2. The Windows networking & devices team at Microsoft has released a hotfix to address this issue. You can read about the problem and how to download the fix in
this KnowledgeBase article. The KB article includes information and a link to the fix on the download center.
I haven't had a chance to download and install this yet myself (I'll try it tonight) but expect it will do the trick. I have an older Lexar 1394 CF reader I can test it with, but do not personally have an external 1394 drive to test it with (yet).
SP2 is a really important update to Windows XP...so much more than just adding a firewall to the product.
-David