That's good hardware. You could/should be able to run a dmoz sized directory on that (depending `on the hits) based on what Alex has posed he's doing in the GT offices.
Importing the database from 2.0 shouldn't make any difference. Once the database is imported and in the SQL database, it doesn't matter where it originated from.
You should try to set up your server to run mod_perl. If you wait, until the next release is out in a few days, you'll be able to run under SpeedyCGI to see almost immediately if that makes a difference (that doesn't require any major changes to the server conrfigurations to run, but the beta5 has some bugs that have been fixed).
If what is happening is you are using the NON-INDEXED search, then you have problems that can't be directly addressed by these (though any performance boosts will certainly help). You might in that case, consider an advanced hardware caching that would keep the database tables in memory, or at least the searchable fields in memory, so that searches are all done 100% in RAM.
Alex may have some suggestions on this.
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