I wasn't a fan of the old Squeezebox Server as well; it was slow and laggy with my 4000+ CDs. And the SB3 device interface was rather primitive. At the time my SB3 mostly sat idle while I used Foobar2000 with my M-Audio Transit. Then came the Touch. IMO a massive upgrade from the SB3. The Slimserver software is quite low profile and I experience no lag, this is with a server running an Athlon 2400+ and 1 GB of memory.
The search feature works fine on my Touch... I never used it on the SB3.
My only complaint with the Touch is the inability to scan my library using the device interface. Instead I have to remote connect to my server and go into the Slimserver software to rescan the library.
I will never miss messing with USB, installing drivers, fiddling with ASIO, trying out different buffer settings, testing the bit perfect output with a DTS track, etc ever again