Try looking at the Process Viewer and/or the CPU monitor. Chances are, its' chewing up your RAM and processor cycles. I have the same system with 1 gig of RAM, and it hogs a lot of it. The promised version 3 is supposed to improve things a bit, and hopefully Limewire and Java will play nicer together.
Other than loading up on RAM or buying a dual gig processor, I think we are stuck for now.