When I'm using SSH to connect to an Ubuntu machine and it freezes, I'd just close PuTTY and re-login.
Is there a better way to handle errors like this? (like Ctrl+Alt+Del in Windows)
The best way to work via SSH is to run a terminal multiplexer like screen. SSH in like normal, launch a screen session. If you drop your connection just SSH back in and reattach to the already running session. Screen also allows you to share a session, split your screen multiple times and detach a session and reconnect, with your programs still as you left them.
If your SSH process is locking up, or something else, then you have a larger problem then I am addressing.
Here is some more info on using screen. Wiki.
Justin S makes a great recommendation. As an alternative you might want to consider trying out autossh. It automatically reconnects when an SSH tunnel breaks.