Yes the "MOTU FireWire Audio" is the ASIO driver.
In the same window that you select the driver, is there a button named "Control Panel"?
If there is, after selecting the MOTU FireWire Audio driver, click it. It should take you to the MOTU's control panel. Set your buffers via this method.
Ultra DMA mode 2 .... How do you have the hard drives connected?
Are they both on the same IDE cable, or do you have drive 2 on the same cable as a CD ROM/RW etc?
When looking at the DMA modes ... you have two IDE channels, Primary and Secondary. Each of which will list transfer modes for Device 0 and Device 1. Device 0 would be for whatever device is connected to the end of the cable and Device 1 would be what is connected mid-stream of the cable.
My suggestion would be to have hard drive 2 on the Secondary IDE controller all by it's self, jumper set to Master. Have any CD/DVD etc drive on the Primary IDE controller with the OS drive. Set the jumpers as follows .... hard drive = master ... CD/DVD = slave.
The IDE controllers may only transfer as fast as the slowest device connected to it. If this is the case, it would be better to slow the rate on the OS drive rather than the audio drive.
If the hard drives are both on the same cable .... well that blows the whole "The IDE controllers may only transfer as fast as the slowest device connected to it" theory, and drive 2's firmware may only support UDMA 2 (hard to believe being a new drive and all). If it does in fact only support UDMA 2 .... I'd think about a replacement or an installation of Windows onto the UDMA 2 drive and format the UDMA 5 drive for the audio.
Pain in the ass, I know.
I can't imagine that virtual memory would be an issue at this point, seeing as how you have 1 gig of physical RAM. You can check this (Windows XP) with Ctrl/Alt/Delete Performance tab and PF Usage (virtual memory). If you have never messed with the virtual memory, then it should still be set to "System managed" sizes. If the PF Usage isn't showing over 300+ MB ... I wouldn't worry about virtual memory at this point as being the cause of your troubles.
I'm just guessing that you are using XP .... if so check out
MusicXP.net for tuning tips.
That's about all I can think of at the moment, but if anything else comes to mind I'll post it.
-Ken