Sounds like you're running a very resource tight system.
Mercury runs fine on such, provided you do not overuse RAM or have very little disk space left.

Periodically we purge the hidden windows update directories, and all the different temp directories that Windows uses. Via the scheduler we defrag every volume every night, and this is done after any backup is done, which also is done nightly. We do however only backup configurations and data, space would be impossible else.

The only case when Mercury could overuse the disk is by using up session log space, under heavy load. Be very careful about enabling session logging. Session logging is nearly the same as many others call debug logs, and they consume power as well as disk.

Tools we frequently use are:
SpinRite from Gibson Research www.grc.com
CnW Recovery www.cnwrecovery.com
Filemon and TaskInfo

If ChkDsk solved your problem that was fine, but if you suspect any disk errors, you should first check the disk with diskmanager, then check the event log. If we still suspect disc-related problems, we run SpinRite (if it's not a RAid 1,5,6 unit), then lastly run chkdsk. However if you have mechanical errors on a disk, ChkDsk seriously damages the MFT and you will have real trouble getting your data back. You will notice problems with the mechanics if simple copy or ntbackup freezes. Then unplug the disk, insert into another computer and use CnW to read sector by sector to an image, and restore from that image whatever you can.

Best of luck

I have scanned my system with TrendMicro for infections, it tells me it's clean.

My Win2K (SP4) system constantly access the hard drive whenever I have Mercury/32 running.  I checked to make certain all system logs were turned off.  It has seriously degraded the performance of the system to the point where I cannot retrieve my mail via POP3 (timeout).  When I close Mercury, the system returns to normal but that's no help.

Have you run chkdsk at boot time to ensure the integrity of the hard drive?

I won't have access to the system until tonight, but I will definitely do so then.  But would that cause a problem for only a specific application?  The disk access problem only occurs with Mercury.  I did not see this problem reported by anyone else so I am fairly confident it is something on my system.

If a bad sector exists, it depends on where it is in the system. If is located where data is written that Mercury is trying to access, then Mercury may be trying, unsuccessfully, to read the data. I have seen similar 'thrashing' which only manifested itself when one part of the disk (one file) was being accessed.

Moving the data off the bad sector (if that is the cause), will remedy the situation.

same goes f memory is overused, then the swap-file is constantly used and system degradation occurs.

check event logs, etc

I ran chkdsk c: /f /r twice (And twice on the D: drive, as well).  The disk activity has dropped off to very respectable levels.  I am left with a bigger problem but I'll research that and post as a seperate thread, if necessary.

Thanks for the help. 

Memory is a true concern on my system as I only have 192 MB, but I am only using half of that right now.

Thanks 

When you say memory, do you mean RAM, or available or total disk space?