I made a video to explain the issue: http://www.youtube.com/watch?v=7buqPacrMdo

Issue happened when we noticed FPS going from 120 to 10 overtime close to spawners when we updated to 09b from 07a, re-logging can temporally fix it so it seems the invisible entities are client side bug.
(Confirmed with MCEDIT)

Invisible Entities ("I" in the debugger) shown in the video are slowly increase and never clear the cache causing severe performance issues unless you relog.

I've attached a small world with 4 devices for you to test.

This is important for map makers!