What is your SD card like? The experience of cm7 from an SD can vary wildly depending on the sd card capabilities. Turns out the most important card capability is "random writes" (card class is apparently based on "sequential writes"). Although I don't think that the card would affect video play much. The latest kernels from Dalingrin had some improvements for video playback.
I have cm7 installed on my internal memory and find it to run much smoother ...
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