Have you moved anything around in your current 3.1 install? I think Mike has a good point about a fresh install. If you reformat the HD, you could always create several small partitions (less than 100MB) that are bootable. Keep your 3.1 install on one so you can go back at will.
As I recall, many of the features of OS3.9 were aimed at Amigas with retargetable graphics. The slow downs will probably be less objectionable with your Picasso IIs.
