DW-MX Hourglass and Non Responsive

On XP/Pro, Using 7.0.1 DWMX. Created a New Site
Std. Stuff for a Local Drive C: folder.
Split Code/Design
When I open a CFM file from the folder and begin to work.
Like, I start to highlight text or dbl-click to select a word or touch a
graphic in Design area....
DW goes - HourGlass-NotResponding for 20--30 seconds and them returns.
Like it is updating Cache(see config settings below)
Works for a bit and then Hourglass.
I am completely self contained for MM environment (CF,DW, etc). I am
connected to internet, and can see I/O.
Like DW is checking for updates or trying to sync with a ghost RDS
server....or long lost friend
Any Thoughts??????Suggestions
Paul
pcaliban (AT) comcast (DOT) net
General DW settings....
Local Info: uncheck refresh local file list
Remote: NONE
Testing Server: CF, Local Folder
Cloaking Checked Default
Design Notes Default Checked
Contribute Default: No