Hi Mike, sorry for the delay, I have had ISP connection problems this evening
Has this happened since you upgraded to SP2 ?
Maybe its one of the many glitches that still need to be ironed out with SP2.
If it has I believe that you can uninstall SP2 and use SP1 for a bit until its been resolved.
If it was doing it with SP1 on then I assume that the 40 gig was your boot drive at some point and then you just added the 120 as a new boot drive ?
Maybe if you format the 40 that would remove any of the system files that XP may stil be picking up which are preventing you from disabling system restore on that drive.
If you have already tried formatting it then you may have to set it as a single master and use the drive manufacturers utility to zero fill it, as its only a 40 gig it should take to long to do