According to Mark Russinovich’s blog, the reason why Vista’s file copy is so slow is because Microsoft basically disabled the file caching for file copies. In Service Pack 1 (SP1), they have re-enabled the file caching, so maybe I was wrong when I said that Vista’s SP1 file performance won’t improve much.
Back in the MS-DOS days, the original DOS system did not come with any file caching. Then various third parties discovered that if they cached both read and write operations, MSDOS would appear to be more responsive to the users. Microsoft, ever eager to catch up with the innovators, eventually implemented file caching for DOS in the form of a utility called SMARTDRV.EXE. Smartdrv cached both file read and write operations, leading to a smoother user-experience when file reading/writing/copying operations were involved. And everyone was happy.
The Vista team apparently forgot this lesson, as it has many other lessons. But as they say about history, if you don’t learn from them, you’re doomed to repeat its mistakes over and over again.
Footnote: this doesn’t explain the reported slow delete operations though.