There's been no fix that I've seen to make the new software run better than the old. The old software rocked as far as not slowing up the more books you put into it. I don't know if the T1 or T2 can work with the old software, but it might be better off for you to go back to it if you can.
If you can't I'd recommend going with Calibre to manage all your books. I have a PRS-T2, and it works great with collections. I have about 4k books split up into 450 collections. I've used Calibre to create the collections onto the Reader, and it will even slot them alphabetically.
It will be a bit of work for you to work 1400 books over into something Calibre can manage for you, but it might be worth it. And no matter how many books you load in Calibre it almost never slows down.