Hi! I did the memory mod just yesterday to my Kobo Mini and I noticed that the KOBOreader fat32 partition is somewhat damaged. Windows does not recognize it properly and under Linux, fsck.vfat says, that there is a minor error with the boot sector backup copy. That's why windows wants to format it, I guess.
I'm not sure if this boot sector thingy has been there from beginning or - I don't really believe it but... - if it was introduced by an unclean umount, i.e. unplugging the USB cable without unmounting...
Anyways - this is not much of a problem until you try to resize the partition.
I tried Paragon Partition Manager 12.5 Free which did resize it without errors, but the Kobo refused to boot (green light never turned to blue but turned black). I also checked the partition for errors with Paragon.
Without resize and with the messed up second boot sector on the fat partition, it _does_ boot up without errors.
Finally I resized with gparted under Linux and the Kobo likes it.
Bottom line: don't get nervous if the Kobo doesn't boot after resize. Try different resize tools.
Regarding speed - I didn't take the time to mess around with benchmarks, but discovered that the Kobo got notable slower with a Sandisk 4GB class4 card. Opening the table of contents of a 10MB epub took much longer with it as well as booting up. I also had a delay when going into standby until the standby screen is shown.
The stock 2GB Sandisk card has around 18MB/s reading speed. The 4GB one had only half of it.
I don't know how much the sd card interface of the Kobo will take at max, but 20MB/s definitely makes a difference....
Writing speed, especially for small blocks, should't be that important on an eReader. It's more important on Android devices or Raspberry Pi
The Kobo places log files that are written to frequently in tmpfs, that is: RAM. There are no frequent writes to flash memory.