Same thing here - even a short sequence just turns on a few LED's - usually in the wrong color, then locks up at the dongle, locks up LSP, and even the COM port in most cases. I was reading a post earlier suggesting work on 1.8 has basically been abandoned in favor of focusing efforts on 2.0. Hopefully it will be much better in the communication respect.
Also happened to see some posts on LSP forums mentioning free upgrades for 1 year after purchase, so I went ahead and pulled the trigger on 1.8 to get started withe the learning curve and get some test sequences started as I understand they should be fully importable into 2.0.