I been using slingbox alot the last few days, making minor adjustments here or there and for the most part I am relatively happy with my slingbox performance. First I am using the latest version from their website and I also turn off all the optimization stuff. I set my bit rate to 600, video fps to 20 and gdi rendering checked off and for the most part it works great on my end. The only time it starts to mess up is when I have to change the station or basically any input to the cable box really causes things to slow down quite a bit. I would stop it then press play and it smooths out again.
Edit: I also been using this app called gfxboost to help with performance, it seems to make a difference in my opinion, it can be found here :
http://forum.xda-developers.com/showthread.php?t=509704