I am really disappointed that Windows 7 MCE is working so badly using XBOX-360 as a Media Centre Extender. Vista MCE, using exactly the same setup, worked well, but I am not keen to roll back.
When it is being slow there is no network traffic going over the wire. Surprisingly when I start streaming a live tv channel then the entire user interface suddenly comes back to life and behaves as expected and performs well.
Update: Disabling the sounds and animations in the extender settings seems to have solved the problem... for now. Would really like to see the pretty animations though ;-)