Okay, some more info. When the thumbnail is turned off, the reader is good to go quite quickly even with hundreds of books added (30-45 seconds).
Thumbnail generation is about 2 seconds per thumbnail. I have noticed that there was a very small slowdown doing things like going from reading a book to the home page or the notes page after adding that many books as if the reader was doing stuff in the background.
I turned on thumbnails, and cycled through my whole list of books to force the reader to generate thumbnails for each book. This made a difference and the 650 became speedy again.
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