One thing I've noticed is that that an open window lets you scroll all the way back to when you first logged on. This is a nice option - but when I leave my connection open for a long time, it makes entering commands laggy if text is scrolling by. It also lags closing the window and adjusting the window size. It would be nice if there were an option to limit how far back the window kept the text available.

Yes, you can limit the amount of text that is saved into the 'buffer.'

In whatever world you're in, pull down the Edit menu, and select World Settings, at the bottom (or hit apl-J). Select the 4th tab, 'Output.' Set the Maximum Buffer Size to a smaller number.