I've been having a similar problem:

i'm running KC on an XP machine which is running 1 window, It's connected to KC on my Vista machine which is running 4 windows.

Every so often the Vista machine will stop recieving keystrokes from the XP machine and will not pass keystrokes between the 4 windows on the Vista machine, not be able to have broadcasting paused/unpaused etc.

It's as though it's stopped responsing completely as the keyclone window becomes greyed-out and cannot be closed/minimised/moved, the only way to close it is through the task manager (which still says Keyclone is "running").

I'm using the 1.8f release on both machines.

EDIT: accidentally posted too soon...