I've got a 16gb class 2 Sandisk loaded with lots of music (2500 files in 179 folders) and several folders loaded with 1.7gb of offline maps, and 5.6gb of free space remaining. My phone behaves admirably in all regards. It wakes from sleep mode in slightly less than one second. From a full power-off condition, the "htc" logo appears in less than two seconds. These times are identical to those observed on my wife's Hero, which still has the original 2gb card installed. Boot-up time from power-off to full active home screen is right at 120 seconds on my phone, which is about 7 seconds slower than hers, but I'm not gonna sweat 7 seconds over a two-minute boot.
All apps execute on my phone exactly as they did when my original 2gb card was still installed. The factory music app comes up in less than 2 seconds to the same spot I paused it in the same song I was playing the last time I used the app, even after re-booting!
Regarding the Hero misbehaving, there have been a very few times when one app or another doesn't act as it should on my phone, and also on my wife's phone. For example, once in awhile the stock camera app will just freeze (this has happened on both phones). Invariably, when that has occurred, there have been lots of other apps consuming lots of space in active memory on the phone, and remaining memory was running very low. I have Advanced Task Killer installed on both phones, and I just kill all open apps, and everything runs fine again after that. I know that there is a sticky thread in this forum regarding task killers, and I know some very wise folks say that task killers shouldn't be necessary on the Hero. I'm just telling you what I've found to work for me and my wife. If you observe an app not behaving correctly, see how much remaining system memory you have available...if it's only 20-something meg left available, well, that's when I see apps having problems running correctly. Kill all the open apps, and re-open your app, and see if it runs okay after that. Just a suggestion.
Btw, without mentioning any merchant names, I bought my memory card from an eBay seller for less than $39, and picked it up myself (free local pickup, Grapevine TX). He's got more listed as we speak. $1.10 to ship USPS.