It could be any number of things. If you are having collation problems you’ll need to resolve those before performance will get any better. Having to collate the data on the fly from one collation to another will cause the SQL Server to need to do a full table scan instead of an index seek.
I’m not sure what the data error could mean without having the actual error message. If you could post that to the forum it would be most helpful. On the SQL 2005 database do you have all the indexes in place? Is the SQL 2000 compatible database running in SQL 2000, or SQL 2005? When you moved to the SQL 2005 database did you update the statistics or rebuild the indexes?
Sorry I can’t provide a quick answer, but your issue requires more questions before answers can be given.