My friend was sending me some files (pics of his recent vacation (too big for email)) and after one of the files finished sending mIRC locks up and my computer starts lagging. After a long while it fixed itself and he tried sending a few more and after all those finished mIRC locks up and lags my comp.... any clue why?

unfortunately it might be one of those things that makes DCC a "limited resource". I personally havent experienced this problem but I've had my problems and heard of others. I dont know if they are going to improve DCC too much from what it is now because they dont intend to make mIRC the next P2P craze. Unfortunately with the limited functions of DCC, it may affect just a couple friends sharing a few legit files too like your situation.

Too big for email? Why dont you both try signing up for a Yahoo email account. They allow attachments up to 10MB and I dont think there is a waiting period on being able to do that like on Hotmail. Try Yahoo and see.