I'd say that the 100mbit network is the first bottleneck. It really depends on your HD speed though. it's like the old saying, the chain is only as strong as the weakest link. So you need cat5e or cat6 cabling, gigabit adapters on all devices & a gigabit switch / router. Decent HD speed. I'd say the 2GB ram is not a big factor - pure disk access is more of an issue than processor or RAM.
3500 files isn't that bad. If you had said 35,000 files that would be different. There is some overhead with each file, writing permissions or other file info, besides just the raw data. Maybe try an FTP program (there are a bunch of free FTP servers) and compare speeds.
It seem that my ethernet card 10/100 is physically attached to the motherboard. I am looking for a gigabit alternate I can use in an expansion slot. I will then connect the cabling and gigabit switch as you suggested. Also thinking up upgrading my laptop HDD to a sata 2 200gb. Thanks for your help