@Webtopia: I hadn't seen it mentioned in this thread, and I've seen a lot of people bitten by that one, so I felt obligated to bring it up.
I don't have a 3G to test on, and I haven't seen anything like this firsthand. So if you run it on the 3G when it's NOT tethered to your machine, do you have any problems with the slowdown? I'd test the heck out of it running untethered by itself, and see if you get the symptoms again. If you try it dozens (or hundreds?) of times in standalone mode and don't get the lag, I'd go the "Homer Simpson" route and ignore it. Running through XCode is not something your end users will be doing, so if you can't reproduce in standalone mode, you should be fine.
