Single process eating 100% cpu seems to be enough to make Dream unusable. (Is that normal?) I guess I should use nice extensively... But I wonder why it is so sensitive, Linux scheduler is normally clever enough to deprioritize those.
Oh and tip of the day: if ALSA mysteriously stopped working for you (but /dev/dsp emulation still works ok), you may want to disable "SND_DYNAMIC_MINORS" option... or maybe finally install udev.