The performance issue arises because of where IDE came from. IDE was designed as a cheap alternative to SCSI, and to replace the old 8-bit MFM and RLL interfaces. MFM and RLL could only address one hard disk at a time, even though two could be attached to the same controller. IDE simply moved most of the controller card onto the disk, reducing cost greatly, but kept some of the inherent MFM limitations - including the 8 bit data path.
IDE (or Parallel ATA as it's recently become known) is unable to talk to more than one device at a time on one cable. For example, if you were copying from the slave on channel 0 to the master on channel 0, it would take longer than if you were copying from a device on channel 1 to a device on channel 0 because only one device per cable can be addressed at once, whereas SCSI can talk to every device on the channel (up to 15 devices opposed to IDE's 2) if necessary.
You'll also find that with IDE, the maximum speed of the channel will be dictated by the slowest drive on that channel, as IDE cannot run different 'mode' devices concurrently. For example, your UDMA100 disk will be crippled if you run a PIO mode 3 CD drive on the same cable.
I've always run IDE CD drives on the secondary channel, and why I've always tried to run full SCSI systems that avoid this caveat anyway.

At the moment, the only IDE devices I have are my DVD and CD writers - my hard disks are U160 SCSI
Cable Select works only if you have suitable cables which are wired for use in Cable Select Mode. It was rediscovered by some 'genius' in the last few years. You're as well leaving your devices set at Cable Select just for ease of use.

However, in the diagram above, your drives will not be physically laid out that way (I'm guessing your optical drives are in the 5.25" bays at the top of the machine, and the hard disks in the 3.5" bays at the bottom, so you may find that you need to set at least one drive on each bus to cable select and force the other.
As long as your boot drive remains where it is, Windows will sort itself out, and you can reassign the drive letters if necessary in Computer Management.