The designer is so bad I almost never use it. In fact, I never drag and drop controls from the toolbox. I just rely on my knowledge of the tags and intellisense in the XAML editor.
What infuriates me is that people on the Visual Studio .NET development team put this app through the testing phase, watched this poor performance again and again, and then said "looks good to me... ship it".
I've found that just simply opening the XAML files in XAML mode still takes forever... See the following link for a potential workaround:http://www.eggheadcafe.com/tutorials/aspnet/46a45a61-922b-4c88-a3df-6a70af3be665/visual-studio-net-2008-.aspx
FeedBack Discussion: Visual Studio .NET 2008 - XAML Designer