How many people have you talked to about their music collections? I wholeheartedly disagree with your statement that most people only have 1 or 2 GB of music. I'll be willing to put a wager on that as well.
Well over 75% of people I have talked to both online and in real life have always told me totals of 20 GB and up - I myself have well over 400 GB of music alone, and another 200 GB of music videos.
Finally, your experiences of copying files locally versus wireless are your own experiences. Local copies will move faster than wireless connections, with the added benefit that you don't have to worry about a wireless card / router crapping out in the middle of a transfer. it's local.
Half of the problem is XP, but the other half of the problem is that when copying large amounts of data, using the native Windows Explorer in XP to copy said files, you've already opened the door for disaster. Copying large amounts of data can be alleviated in XP by 1) copying smaller sets, 2) using a file copier app like TeraCopy / Robocopy, or 3) Don't use your computer for anything else when performing the copying, and temporarily disabling your Internet connection and then your antivirus' real time protection to help speed things along.