Correct, the stylus tap movement is not yet playable - it breaks object-pick-up.
Are you referring to text that occurs when you are engaged in a dialogue with someone? This should appear at top of screen, always.
Perhaps you are seeing other townspeople talking to themselves out loud, when walking around town. If those characters are off the edge of your screen, you will only see part of the text.

I share your pain about framerate and pauses while walking. But remember that Exult has been in ongoing development for many years, and the game's goal is best compatibility with the original U7 - not performance optimized for 220mhz CPUs. Don't expect me to find a magic bullet to fix the performance problems soon.

Well, actually i _can_ see a couple of ways to get better performance, but they might introduce gameplay compatibility problems. Therefore i'll implement the dangerous speed hacks as an in-game toggle called 'PupSpeed' or something :P that will give higher framerate and reduce the frequency of those annoying pauses. If that breaks game compatibility at some point, just switch toggle back to 'compatibility mode' and reload your last savegame to get past the trouble spot.

cheers