In order to do the update they will have uninstalled the server database component for version 5 and installed the 2009 R2 component
After this change i suspect that they have not increased the default Cache size of the server and the defaults are pretty low and will cause this slow down (I have had this at a client before)
Sorting it out is pretty simple, you can find all the information on the NAV install CD under
Documentation\PFiles\Microsoft Dynamics NAV\60\Documentation\Install Guides\
nav_install.chm
Then go into Configuring -> Configuring Classic Database Server, For all the info
Shout if you run into any issues and i can assist as i have sorted out the same issue before
Cheers
Nev