Heres the thread:
Post #60 is where I solved mine. Heres what I posted back then:
"I had the opposite experience.
Setting it to keyboard lagged, to remote doesnt.
To further the mystery, I have had many many harmony remotes and never ever had any noticeable lag until changing out my Harmony 700 for a Harmony One tonight. (This is the second 'One' I have owned)
The 700 went through all the menus very quick, as quick as I can keep hitting the up or down buttons. Tonight I got a new 'One' and choose 'replace remote' in the harmony software and sure enough there was an unacceptable lag.
I tried changing every delay and repeat I could find but none worked.
I then added a Microsoft Remote as another device, added it to my WATCH XBMC activity and mapped my direction keys to use the Microsoft Remote instead of Microsoft Keyboard and now the menus works as fast as can be.
Very strange. Also strange that I see no lag in any of my other activities, only in the xbmc menu until making the above change. "