I recognize that bug report! Saw that back when I was trying to make things faster. I didn't mean to put a whole lot of emphasis on the painting being the problem, although my last post sure did make it sound that way. I essentially hit two performance hurdles:
1) QTextEdit & slow paragraphs
2) QTextEdit with HTML or rich text being too slow to paint for my tastes

My solution was a brand new class from scratch. I didn't need most of the QTextEdit functionallity/overhead. Sounds like you are headed in the right direction. If you have a full-blown version of VS 2008 at your fingertips, do a performance tuning session and see where at in the bowels of QTextEdit you're spending the most of your processing time.

Good luck,
Paul