Well, seems like I "solved" it. I just turned off keyboard repeat in the KDE control center. Strangely, merely turning up the delay didn't help, as it would still do the repeat unpredictably, even with the delay up at 600 msec or more.
Dunno, pretty weird...
If I remember correctly that was the problem. I was using "home brew" scripts to bring up my ethernet and I was not clearing the DNS entries, every time I brought the interface down I would have the problem. I believe that either time update or some other process was trying to do DNS look-ups and they were failing because the interface was down. It must have been causing something to block because my CPU load was always very low but my whole system was very slow. Initially I rebooted every time I had the problem. I believe I solved the problem by removing the DNS entries from /etc/resolv.conf.
I could not believe it either. This was on my laptop and happened with bot wireless and ethernet.
Cranking the delay up to 600ms _appears_ to have worked in my case. The interesting thing is that this problem did not exist in FC1 nor in RH7.3. I can't remember for certain about RH7.2 but I know that first it was, then it wasn't and now it is.
There are several things about FC2 that make me damn glad I still have FC1 intact on another drive. Time will tell...