In SQLite, autocommit is on, so if you weren't explicitly setting your transactions, you might have been commit after each update. Also, the standard disk cache is 2MB, so if you think your DB should have more memory than that, up it with default_cache_size.
Ah, I wasn't, so that combined with pilif's comments regarding the file being locked for writes would make a lot of sense as to why things were slowing down.
