Thanks for the advice Ten, I'll re-install and give it another go but have been having trouble persuading it to make a direct connection... I'm on a router on a network (though this computer will be the only one using the software).
Sorry to get OT diamond, I can't for the life of me think why your computer would be suffering so because of Kazaa (you're entirely sure it's Kazaa... right?) I've never had any problem like it. As a rule of thumb I don't share any files and specify not to function as a supernode... but I don't see how being any different would affect things. Perhaps you should try Kazaa Lite, making sure you wipe all aspects of Kazaa first (use AdAware..worked for me).
Best of luck...