The problem was so immediate and pronounced, I can't imagine it's a defrag issue.
I added the second drive on the same cable as the first. Configured the original as master and new one as slave via jumpers.
I'm starting to think that something got screwed up software wise when I made the change. For example I moved Project 64 to the new drive and I know it writes to the registry...could it have mucked something up? I dunno.
I'm going to try unplugging the new drive (from power and IDE) and see if that fixes the problem.
Could partitioning be an issue? I don't understand partitioning so when I added this drive and formatted it, I partitioned it as "primary" (same as the first, C: drive).