I'm running Mac OS 8.6 on a 266mHz G3 and have had similar problems, with LimeWire experiencing "attacks" during which the whole system freezes up for several seconds or minutes. I've found these can be minimized by:

1. Making sure you have the most recent version of Apple's MRJ.

2. Using a maximum of 5 open connections.

Increasing program memory didn't help me much, but I didn't go as high as 40 megs. A lot of older Mac users (that's users of older Macs, not older users of Macs) might not have that much to spare.