The switch to Unicode could certainly explain some slowdown, however you haven't really defined what "working great" on 6.x is. so there's no way to say with any confidence if this wholly explains the performance difference you're seeing.
How fast was it running on mIRC 6.x? 50 milliseconds? 1 second? 2 seconds?
It would be great if you could give some actual $ticks-based timing measurements for both 6.x and 7.x so we had some hard numbers to compare.
