I experienced this exact same problem recently. I suggested some workarounds and performance fixes here. Basically you can turn the status cache off (which worked great for me as I didn't use the icon overlays very often), or include/exclude particular paths for the icon overlays to be used in. Hope that helps.
installing TortoiseSVN 1.6.1 slowed windows explorer alot !
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I experienced this exact same problem recently. I suggested some workarounds and performance fixes here. Basically you can turn the status cache off (which worked great for me as I didn't use the icon overlays very often), or include/exclude particular paths for the icon overlays to be used in. Hope that helps.