Hmm it seems to be extremely slow whenever there is network traffic (e.g when downloading a file, i get mouse lag)

I have it set up so its as a developer box, i changed the settings so that it will give priority to user apps instead of background services, and prioritise user network traffic vs that of sql server etc.... (usually this is the case with windows server) so i dont see why this is happening....

Im gonna remove ZoneAlarm and Spybot and see what happens. Btw, i solved the taskeng slowness. I found a site (msdn blog) where a guy had a similar issue. The defauly firewall setup on server 2008 blocks IE RSS sync and each time it fails it spawns a new process to try again leading to crash. Its a shame MS let this bug into the RTM version of a server OS.