I had similar problems with horrible slowdown. Reinstalled VW, even Windows, to no avail. Still too slow. Through trial and error, I discovered that a driver I had recently installed seemed to be the culprit. If I remember correctly, it was the Wacom Graphire tablet driver that screwed things up (or it could have been the Matrox Millenium driver). Reloaded an earlier version, and problem disappeared.
Have you updated any drivers lately, or added new hardware?
And Katie, for what it's worth, saying that 40 undo's is excessive seems relatively insensitive to users. This is a supposed "feature" of VW, and implying that the way I use the program is the reason for the problem is weak. If the "feature" is not robust enough (or at least limited in some way), to handle user preference, it should not be extolled as a feature, or it should work as expected. This is not the user's fault.
I'll get off the soapbox now.
As always, your prompt replies and involvement in the forum is appreciated.