Check your setup of Cp7 against these guidelines:
It sounds like you may not have all default locations pointing to local C drive folders and some things, e.g. themes, layouts, project files, or cache might be on remote servers.
Thanks for the guidelines Rod. I'm not sure if it's practical for me to run it as an administrator all the time but I've given it a try. The "publish at" and "project cache" were already to my local C drive. There is a small improvement in speed to preview but it is still extremely slow.
Thanks for this tip. I was having similar slug issues with CP7 but running as administrator, I have noticed a quicker response when doing tasks such as updating linked PPT files.