HD Install :: USB drive issue

Hello all,
I've DSL running on my old Compaq Presario 1200, Pentium III, 5GB HD, 60MB RAM. I'm using a USB mouse with scroll wheel.
I am ale to mount my 2GB pen drive - sda1. I can also browse through the folders in my pen drive. But when I try to read or copy any file larger than 1 MB, my DSL stops responding.
Please advice.
Cheers