This is probably a red herring - but just in case:
I am running new ACR 5.7, new DNG converter, LR 2.7, LR 3 Beta2, and Photoshop CS4 on a Dell M70 notebook with 2 Gb ram running Win 7. I have been working on a presentation on HDR technique so I have been shuffling files in various fomats (including DNG) in, out, and between apps but mostly in and out of PS CS4. Things went unstable and CS4 and/or the Photomatix plugin would run out of memory doing things I had done minutes before. I turned on task manager and discovered that when I closed Photoshop memory in use did not drop! The commit was stuck at 1.7 Gb and the CPU (this is a single core machine) was running 70+% on searchfilterhost.exe. A Google search turned up references to a beta DNG file codec as a possible problem. Hence this post. I have since told the disk indexing functions to ignore DNG files and shut off content indexing at the drive level. With indexing shut off everything is back to normal. I will turn the indexing back on with the DNG files off. If that works I will later turn the properties indexing for DNGs back on. If this yields any useful (as in repeatable) info I will post an update.
Kudos for the much improved NR in LR3! Sam
The problems with the DNG beta codec have been reported elsewhere:
http://forums.adobe.com/thread/557831 and in other forums that I can't place.
I encountered the same issue and replaced the beta codec with a third party set of codecs. These opened dng and the latest Canon RAW files both in vista/win7 and in XP SP3 and resolved the indexing problem. Cost about USD6. I'm not advertising the product so you should search yourself if you want to go that way.