Microsoft released a hotfix for this. Just download it from their site, and install it. They will release a better fix for this in Windows 2000 SP2. After you install this, Windows will still show the hard drive running in PIO mode, but it won't be. You can confirm this with a hard drive testing utility such as Sandra.
The performance of your hard drive won't be as good as Windows 98SE, but it is still good enough until the final fix is released.
I can't get to Microsoft's download center to give you the link (our server causes scripting errors there and at this site for that matter) but maybe someone else can post the link.