This is on Snapshot 12w50a

Logged on to vanilla server my friend and I play in. He had a village fenced in. As I entered that chunk for the first time the game slowed to a 0-1 FPS crawl and intermittently logged me out.

There were HUNDREDS of villagers. Probably only 20 doors total in the entire area, maybe even less. Not only that but he had been logged out for days and we are not even close to other players.