Hi!
Figured I would post my woes with trying to build the handheld cache. I have about 8k songs that I was trying to encode to MP3 before loading onto my iPod. Every 150 songs or so, the whole thing process would hang for about 10-15 minutes - MC was still responsive, but CPU activity dropped down to almost nothing - and no LAME in sight. This would happen even after I stopped the caching process and restarted it later - MC would whiz through a bunch of songs, then hang, then whiz through some more, then hang. Really really slow, and really really annoying.
After I enabled logging, I was able to track down the problem. At each time, it seemed that MC was trying to "play" a corrupt FLAC file. Once I removed the file from my library, everything worked fine. The strange thing is that I don't know why MC would have been trying to play the file, since it wasn't in playing now.
Stupidly, I restarted MC a couple of times which deleted the log file, but I will try to recreate the problem by re-importing the corrupt file once I get my iPod up and running. I remember that the task in question in the log file was something like waveoutplaythread.
For those of you with similar problems with the cache / iPod encoding stopping randomly, turn on logging and look for any weird file access with really long completion times (like 950000 ms)
Hope this is useful!