As I reported earlier in this thread, I have installed Ubuntu 10.04 version and upgraded linuxcnc. It works well enough (steps fast enough) that I settled on that and moved on to actually doing stuff with the software. That iso can be put onto a cd so it avoided the problem with not having a dvd drive on the PC I am using as well.
If you have trouble finding this iso file some links and info are here:
www.linuxcnc.org/docs/2.5/html/common/Getting_EMC.html
You findings about 8 and 10 being good and 12 being much worse are similar to mine. I went with 10 as I wanted to be as up to date as possible and still have decent performance. It would be nice to have a bit better performance than 10 (step rate improvement) but at this point the gain isn't worth the work to figure it out, at least for me. And I don't plan to hook the box to the internet so security fixes and such of later releases aren't a concern.