I've just been having the same problem. If I let tell Launchbox to update all (>4000) of the games in my Arcade list it sits there cycling through searches for a long time.
I've found that if I select just a subset of games, say 100 at a time it completes very quickly. To do this simply click on one game in the Launchbox menu, scroll down your list a bit and then hold down shift while clicking on another. You can then goto Tools -> Download Metadata and Images and it will download the data just for the games you've selected.
Maybe it would eventually complete the >4000 all at once but I haven't got the patience to wait :-)