weird, we set up a couple more pcs (4 total,3xp 1 98) on the network (we're not using the local lan addys,we're running the program thru the ip addresses from his ISP), and did some variations on hosting and downloading. Turned out that it didn't matter which xp computer was hosting, the other 2 would still only download at 30-40KB/s while the 98 machine downloaded at 3 to 3.5mb/s every time. Even when the old 98 machine hosted, the other xp pcs would all grab the files at 2mb/s everytime. But without fail the xp machines get the 30-40kb/s download speeds when they interact with eachother.
Ahh well, thanx for your suggestions anyway Rafi.