Performance problems after a Win98SE re-install

After I installed a new 40GB hard drive in my laptop PC and
re-installing Win98SE, I used an old version of Partition Magic to
repartition the drive into 13/15/10GB pieces and change the cluster size
from the default 32KB to 8KB. However, I've noticed that while
re-installing data files and other applications, the disk access light
stays lit up for up to 30 seconds and Windows stops responding to the
USB mouse (touchpad mouse is fine, though). Eventually, Windows starts
responding to the mouse and continues with whatever it was doing.

I don't recall this happening after any of my previous Windows
re-installs; could the smaller cluster size cause this behaviour, in
spite of it being appropriate for the given partition sizes? (I don't
recall whether I've resized the clusters during revious re-installs.)

5400rpm Western Digital 2.5" drive, DMA enabled
128MB RAM
Virtual memory controlled by Windows

- Alan