Glad to hear you are getting somewhere.
We don't have much experience of Vista (most of our people use Macs, and the rest tend to shun Vista). The problem may be related to deferred procedure calls which can cause I/O operations to get delayed. Check out the DPC monitor on the Dice Control Panel, leave it running for a while, and see if it suggests a change in operation mode when in Aero or N-aero.
Regarding the formatting, I always like to have short paragraphs for email etc, as I find people don't read long ones. So, I make great use of the RETURN key.