Vista - Need help with large file copy freezing on Vista SP!

Hello, I am running Vista SP1 fully up to date on modern hardware (Quadcore,
X38 Gigabyte board) with all current drivers.

Windows Explorer will freeze whenever I tried to copy a few files one after
another if the total sizes approaches 1 GB in total.

Even more strange is the fact that the freeze will occur even if i REBOOT
the OS between each copy of a smaller size file (like 300MB each), such that
by 3rd reboot and the 1GB limit hits, the copy message will appear but then
the progress bar will be stuck forever. if i attempt to cancel it, the whole
computer then freeze once i press the cancel button (but until then, the
computer is still responsive).

Copy smaller size files (such as <50MB) works without any problem.

The copy problem occurs with local copy between 2 drives or within the same
drive.

I have scanned the internal SATA drives for hardware errors; none found.

Can someone please tell? I need to copy large files for backup and the
system is now unusable.

While you're searching for a shell fix I'd try TeraCopy 2 beta. It has both 32 bit and 64 bit versions. The beta seems to work much better than stable v 1.22 esp. on Vista. I don't have it set as default copy handler but select TeraCopy Here during drag & drop.
You can try it both ways. The nice thing about it is you can change the .ini file buffer settings to optimize throughput.