I got the HDD up and running, and you're right, it is rather slow. I did a couple of speedsys tests (fast and full), and the results were not impressive. I've got a minor technical problem here, so I couldn't upload the speedsys screenshot(s), but the fast HDD test score was only 507. The low idle noise was superb, but the seek noise was about the same as any other good modern desktop HDD.
I tried plugging the 3.5 to 2.5 adapter cable in to the Asus P2B mobo's integrated IDE port, but the mobo's BIOS HDD detection feature froze. The HDD is 80GB, and the mobo's BIOS is only 1012, so maybe I need to get the latest beta BIOS? Anyway, I used an Abit 66 speed PCI IDE HDD card instead. Unfortunately, this Abit HDD card could only see the HDD as a 10GB drive, not 80GB, but at least it didn't freeze, and it also allowed me to use the HDD.
I installed Windows 98 on to the HDD, and the whole process wasn't too slow. Unfortunately, the Abit HDD card shows up as a yellow ? symbol in the system control panel section, and I haven't got the driver for it. I had a quick look on Abit's website, but couldn't find it. This doesn't seem to cause any problems, but I did notice one thing - if I shut down Win98, then power on the PC again, scandisk pops up telling me that I should shut down the PC properly, and then proceeded to check the HDD.
My very quick conclusion is that getting a 4200 RPM 2.5 inch HDD may have been a mistake. Modern single platter (eg 80GB) 7200 RPM 3.5 inch desktop ATA IDE HDDs are both fast and quiet. (But the problem with this is that those specific types of HDDs are getting rare, in terms of buying them brand new from online retailers for instance.)
Perhaps a 5400 RPM 2.5 inch HDD would have been a better choice?
Edit: Please see my 2nd post below - I've improved the HDD test score from 500 to 900.