If DMA was working fine under 98/ME, then there should not be a problem with Windows XP. The only thing I could see is possibly an issue with the ALi chipset and XP. The only other possibility is that DMA was never working and 98/ME is lying to you (which isn't outside the realm of possibility).
<font color=red> If you design software that is fool-proof, only a fool will want to use it. </font color=red>
I think Win 98 / Me was correct that DMA was enabled. I tested the drive using DVD Speed, and under Win Me with DMA it says the CPU usage is 12% but under XP it's 30%.
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