Sounds like your mac doesn't have enough memory (RAM). LW kindly (!) does nothing (rather than freeze) when there's not enough memory to launch iTunes or QT.

And as far as vanishing files are concerned, the only thing I can think of is that you've moved the downloaded file to another folder, or you changed your shared folders, or probably you altered the folder/file name, and then you refreshed. LW will consider the files "gone" on refresh unless the files (and the folder in which the files are) are in exactly the same condition.

So there you are.