Maybe you cant read - I affirm that performance _does_ deteriorate significantly, ie much.
Thats with indexing disable, something I do among first things after fresh install, WinXP and Win2003 are all based on same NTFS, AFAIK this arae was not improved, however it will be big time in WinFS - they will finally stop needing to "table scan" all files in dir to find them, ie will use internal filename indexing as well as content indexing.