Silly CatKnight, you should *always* reformat the hard drive when changing/upgrading operating systems, especially Microsoft operating systems.Here is how I would do this:
-Boot off the ME CD and then format c:
-Make a directory such as c:\winme and
-Run "smartdrv" in the directory with all the WinME .cab files on the CD (This is not really optional. DOS mode without smartdrive is why everything is running so slowly)
-While still in the directory with the .cab files on the CD, copy *.* c:\winme
-Run setup.exe from the c:\winme directory. You no longer need the CD.
The reason you should always copy the .cab files and install off the hard drive is that in the future when you're installing new hardware or drivers, Windows won't ask you to stick in the CD. It will know where to look.
No offense, but since you don't appear to be able to install ME properly, I wouldn't recommend doing 2K. If you insist, adapt the above procedures. Note that the installer executable for NT is called "winnt.exe", not "setup.exe". I also wouldn't advise converting the drive to NTFS (Win2K's setup will ask you if you want to do this).