I dropped about 1700 epubs on a card today and put it in my Touch. I'm seeing the same sort of behaviour. The device is freezing for a while after removing and reinserting the card. I think part of the problems is that only about 1200 of the books were processed by the device. That means it keeps finding books that seem to be new, but can't then process them. I'll have remove some and see what happens.
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