I am affected by this bug as well.  I run BOINC and Hardy on two
computers and occasionally transfer files between them.  Network
performance degraded quite badly.  Was getting as low as 300KB/s on
Ethernet (10/100).

I did testing using:
time md5sum /dev/urandom & pid=$! ; sleep 10 ; killall md5sum
time nice md5sum /dev/urandom & pid=$! ; sleep 10 ; killall md5sum

Results:
[EMAIL PROTECTED]:~$ time md5sum /dev/urandom & pid=$! ; sleep 10 ; killall 
md5sum
[1] 7822
[EMAIL PROTECTED]:~$ bash: line 1:  7823 Terminated              md5sum 
/dev/urandom

real    0m10.116s
user    0m0.112s
sys     0m8.589s

[1]+  Exit 143                time md5sum /dev/urandom
[EMAIL PROTECTED]:~$ time nice md5sum /dev/urandom & pid=$! ; sleep 10 ; 
killall md5sum
[1] 7857
[EMAIL PROTECTED]:~$ bash: line 3:  7858 Terminated              nice md5sum 
/dev/urandom

real    0m10.028s
user    0m0.120s
sys     0m9.893s

-- 
2.6.24-2: Regression with idle cpu cycle handling
https://bugs.launchpad.net/bugs/177713
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