there is no reason it should be slow when working properly.
i wonder if the problem is that you have an item in your launchbar that does not exist on the disk?
you might also check that the topmost "Options" node has the following UNchecked: "Search different drives for missing node item paths"
and that the dock node has the following UNchecked: "Hide Missing (slower)"
see if that makes any difference.
you might also try starting a new dock file with just one or two items and see if it's still slow. if not then at least we know it's something you are adding that is confusing the program and making it slow down.
you could also send me your .mcf launchbar file if you want me to take a look at it (email@example.com