The PROBLEM has been going for less than a week, I'll try my best to explain as detailed as I can.
I've got two HDDs, 200GB for storage (Maxtor 6B200P0), D: drive and 80GB (6Y080L0) for program files and windows, divided into 2, C: and E: drives.

-I realized the problem when I try to move some files from E: to D:, it is so slow, 20+ mins to move few GBs files and you can see the "Moving files" window FREEZES once every few SECONDS and it freezes my windows too.
-When I try to watch videos (around 180mb, 22-23 mins) and jump from start to middle or anywhere else, it will freeze my windows.
-Very slow when doing defragmentation on D: drive and when doing it, my windows will slow a little and the music i'm listening will have some interrupted sounds. It took me half a day to defragment my D: drive and it is still unfinished! I remember it will only take few hours to complete,I'm saying this because it has never happened before. I also did chkdsk but no errors found.

I borrowed SpinRite disc from a friend and going to run it later, but first I want to hear your suggestion.

Thank you for reading and I'll provide any more information If needed.What operating system are you using?
How much RAM do you have installed on your machine?
How much free space do you have on the drive in question?Oh, I'm sorry. I was thinking too much the problem and forgot to post my computer specs.
I'm using Windows XP SP3, 1GB RAM. The HDD in question has 20 GB now. Does the freezing happen after you've had your computer on for a while?
Do you have any virus protection?No, it doesn't. I can play games with no problem.
I have PANDA Internet Security 2008 installed on my computer.To easily rule it out the hard drives by downloading Seagate's SeaTools for DOS
http://www.seagate.com/www/en-us/support/downloads/seatools/

My rule with hard drives, if they fail any of the a smart test or have bad sectors I move all the data off them asap and then replace them.

If the hard drives come up clean then it could very well be some evil software messing thing up.

JoeI ran Seagate's SeaTools for DOS and found one error. The tool repaired it and now no more freezing while moving files but still very slow.

Any more suggestion?

And will a spoiled RAM affect the problem? Quote

And will a spoiled RAM affect the problem?