I spent some time today doing some work on a site whereby I needed to add a large amount of images to the style library of a SharePoint Site Collection. To speed up the process of course I would select the Open with Windows Explorer option so I could just paste the required files in with ease.
Instantly I would notice a significant freeze and then subsequently extremely low speeds when uploading. Since this was my first time experiencing this, I immediately tried a different server to see if the problem had to do with network settings on the server. I experienced the same thing on multiple servers.
We then tried to replicate on other desktops and it turned out everything was fine on Vista running IE7 or IE8 connecting to the same document libraries. Finally in the end, a little searching lead me to the forums where a user had pointed out that this issue can be resolved by going into your IE Settings and turning off Automatically Detect Settings.
So if you run into extremely slow speeds uploading to a SharePoint Document Library via Windows Explorer (Webdav), do the following from IE.
Select Tools -> Internet Options -> Connections -> LAN Settings and unselect the option for Automatically Detect Settings.
I was totally surprised that this was the fix so I had to provide some extra search engine love for the forum post that saved me…