This happens on my machine at work. But I attribute it to having too much crap on it and Windows being stale. I run the video at 1280x1024 and there are enough programs on it to fill the screen when the 'Programs' menu is fully extended. It's also been through a marathon of Windows versions.

Windows NT 4.0 Dual processor

Windows NT 4.0 Single processor (can't recall how I got NT to downgrade)

Windows 2000 Pro

Windows XP Pro

All those Windows upgrades probably screwed it up good. Not to mention going from IE 2 to 6. Every computer I use that is faster than a 400MHz Pentium II seems to handle large 'Programs' lists pretty well. My 800MHz laptop has a ton of crap on it and it doesn't choke.

I would assume you have DMA access enabled in Windows on your hard drives and IDE drivers loaded. Could just be that your hard drive is slow as hell too. If all that checks out, I suggest you wipe your machine (something I do often on my personal machines). You may not want to hear that though.