What transfer method are you using, is it USB ? Does your wife use the same type of transfer method ?
My guess would be that your system is using a lot of hard disk page file (virtual memory)whilst doing the transfer. If you hard disk is fragmented, this could cause problems.
I think your first move should be to install more memory. I suggest you increase to the Windows 98 (unofficial) maximum of 256 MB.
Once your programs have room to breathe, try again and the situation may be improved.
Even if it doesn't cure this specific problem, the upgrade will benefit your general windows performance hugely.