So far, I have not had any problems with Windows 7 Ultimate on either the 64 bit install or the x86 Netbook install.
I have not tried a conversion on the Netbook.
But, the Conversion from .LIT to .EPUB was around a minute. I didn't time it. And, was surprised at how fast it went.
(On HP DV6609wm 4GB/320GB Athlon X2-64 Win7 Ultimate X64)
To get a better idea of your situation. Version of Calibre, Processor, Memory and number of other things running would be useful. I am generally a one at a time Windows User with 4GB and an Athlon x2-64 Processor. So, I am probably faster than most Windows Users.
Vista also has a bad habit of running tons of useless services in the background.
Vista was also the most recent "ME"...
Right now it looks like Windows7 is the "XP" the rest of us were holding out for.
Lockups can also be caused by Driver Issues, Video and Sound in that order. As well as heat issues.
Calbre does seem to warm my Netbook up a *lot* worse than Stanza.
If you haven't bought a can of Dust Off and blown the dust out. You might also want to try that.
As for specific Calibre issues that would be Kovid's area of expertise.