I have had the exact same issues before. I have only had a chance to scan read as I'm at work... The HD issue (only recognising 1/2 capacity) is instantly fixed (as previously mentioned by others) by installing SP2. IIRC - control panel, then it's admin tools - storage/hard drives - the 'missing' section should be sat there, simply activate it.
You can then re-size the partition if you wish to merge the two into one drive. I recommend leaving a partition and having the OS one one and all prog files exe's on the other...
As for the usb's - once SP2 is installed, a restart should fix the prob. If it doesnt, uninstall your mobo drivers and reinstall them all.
That worked for me, hopefully it will work for you
Well as long as you have a LEGAL VALID licence for xp you can download one. When you buy a piece of software your paying for the licence to use it, not the CD its on. But you MUST have paid for your key to start with.
If you don't like like that option you can nLite a cd, wich someone else will have to shed light on cos ive never used it myself.