I can confirm this on a fresh install of 8.04, kernel 2.6.24-16-generic.

Any sustained disk I/O causes other apps to become unresponsive.

I don’t get how this was not caught in beta, because it has the
capability to render my system unusable.

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Heavy Disk I/O harms desktop responsiveness
https://bugs.launchpad.net/bugs/131094
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