I believe I've seen this also. It was worst when I began using LW 1.4b on a G3 w/OS9.0.4. I would regularly see the sleeping variety you described on starting LW. I assume the number of files I shared (~500) might have something to do with it. I also experienced the more severe "reboot" variety, which seemed to correspond to hosts dropping off just before the occurance.

Since upgrading to a G4, I've experienced fewer "sleeping" freezes and none of the "reboot" variety. Maybe it's not that the sleeping variety dosen't occur, it just doesn't last as noticeably long. Aside from having a faster processor, my new configuration also has more memory (256MB vs 128), also I changed LW's memory config to double the original presets.

It may also be noted that I'm still trying to understand configuration options (see the "Strange upload phenomena" thread).