I've been meaning to get back to this thread. Unchecking apps has fixed it for me. Thank-you very much!
I have had the issue with a few different ROMs including stock froyo and gb. It seems to have to do with searching the phone and google instant results are slowing it down way too much.
P.S. if you are the modding type, it does not happen on CM7 with it searching many things including apps and contacts.