One of the rules for Windows is that the less space you have on a hard drive, the slower it runs. I've typically liked to keep at least 10% of a hard drive open, for best results.
As far as hard drives go, though, there are many different aspects that affect speed. It's quite possible for a 40 gig hard drive to be quicker than a 300 gig hard drive, depending on rpm, connection type, and format.