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I also have problems with Kindle freezing while highlighting and bookmarking. The problem is intermittent. I usually wait a minute or two, and it'll finally come back to life without needing to reboot. The issue's been reported elsewhere, so it's not all that unusual. Some have stated that it has to do with the size of the "My Clippings" file or indexing, but I haven't been able to pinpoint that as the problem in my case. I regularly delete "My Clippings" and check for indexing. I do have a lot of books on my Kindle, however.
As for the frequent rebooting, if you have your Kindle in the unlighted Amazon case (with the hinge), try removing the Kindle from that and see if the problem continues. There have been known problems with that case, and Amazon will take care of you if that's the problem.
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