Cant comment on running PMS on Linux. My experience is limited to PMS on Windows, and here for me it runs near flawlessly (latest v0.9.6.2b) stable & fast.
At first I also had a few glitches, but every one of them turned out to be network (performance) related. You may think your networking is working properly, but its only when you try stream high capacity media (1080p) consistantly that you find out if its truly optimal (the acid test is fast forward on a 1080p file). I had to go through a bit of cable fiddling, WiFi AP firmware and server NIC driver updates before thinks started humming.
As far as transcoding goes, my understanding is there is none between PMS -> PMC. With full PMC, all video decoding is done client side, while with other clients this is not the case e.g. Apple iOS client.
So I would advise diagnosing the networking side, but cant help on the PMS freezeups, has never happened for me on Win.