I too witnessed the 'windows is running slow when installing' bug. I often would use the mouse cursor to 'mark' the position of the loading bar (we really are spoiled for speed these days). That way when I would walk-away from an install I could see if the progress meter moved while I was away. More often then not the progress bar would still be where it was when I had left. By moving the mouse activity would return and the installation would continue.
I always assumed it was the graphics that were not being updated. A small bug with the install would keep running but the lack of input interrupts caused the display to get 'stuck'. (That would explain the sudden 'jump' in progress bar movement as soon as I wiggled the mouse.)