I had this issue. We are running 2008 R2 Core DFS with XP and Windows 7 Clients. This issue does not occur with Windows 7 only on the XP Clients.
I fixed it by setting the folder option to "Use Windows classic folders".
To role it out to the whole office I set a GPO to do this "User Pol -> Policies -> Admin Templates -> Windows Components -> Windows Explorer -> Turn on Classic Shell"
Just be careful when you set this GPO for Windows 7 clients as it changes opening folders and files to single click. So I split the clients into different OU's for different OS versions and set GPO's accordingly.
All users are working as they should now. No hanging and snappy. I also set the Referals Cache duration to 43200 (12 hours). As the namespace does not change at all and there is no reason for the clients to keep polling the namespace every 5 minutes.
Hope this helps people out there .... it took a lot frustrating hours to get it sorted.
