Changing the lookup method is unlikely to have any effect, since it doesn't change what the server does.
Normal lookup: Get's local information from the local computer.
Server lookup: Get's local information from the server (using the /userhost command after you've connected).
His problem is probably to do with the server trying to connect to his computer for an ident request and waiting for a long time for it to connect, it would probably be solved by turning identd on and making sure no firewalls/routers block the server's request.
