Just make sure to begin with the official command-line tools and you'll learn quickly, avoid fancy clients like TortoiseSVN that does stuff behind the scenes.
I'd also like to see LFS become threaded, but in the meantime i would say there's something wrong with your setup if both LFS and Fraps are running on just one of your cores.
Attached is what my usage looks like when recording.
The problem isn't between the Insim application and LFS, it's between the LFS server and connected LFS clients. If you ask the LFS server to send too much data to a client (e.g. by sending lots of buttons) you're going to flood the buffer(s) and seemingly cause LFS to panic, dropping clients etc.
I've got my home server sitting on a shelf in a closet, up high near the ceiling, next to two external harddrives, my router and firewall. There's zero air circulation. Everything has been running fine for years.