I posted this in Hotline to Linden but I thought I'd add a comment here too.
I ran Captions last night for the first time under 1.7, and it was flawless. Normally it would have been a bit laggy and problematic with that many people. Instead, it was smooth and responsive. I've never seen it do that well before, even with a small crowd.
Obviously 1.7 has problems, but at least in some areas, it really is a LOT better.
Whatever you're doing for handling scripting under load is working beautifully.