Have you restored the original search behaviour by clicking the search magnifying glass and unticking Search entire library?
If your library is stored on an external drive or a network share you will get some performance gains by leaving the media where it is, but copying the library files onto a local disk and connecting to them there. (Note extra care needs to be taken when migrating a split library.) Every action in iTunes triggers the recalculation of all smart playlists and the rewriting of the iTunes database. Keeping the number of playlists to a minimum will help performance.
The tip about unticking search entire library helped search performance but not update performance. All of my files are located on a secondary internal HD, and only have two playlists (both smart playlists).
Even if performance were not an issue, the interface itself is not particularly scalble as compared to iTunes 10 and earlier.
Have you explored all the options in iTunes 11? Have you enabled the side, status, and menu bars? Enabled list views everywhere? Turned off the display of iTunes in the cloud purchases? I agree that repsonsiveness does seem to drop off sharply with larger libraries, but a larger database needs a more powerful computer to run effectively. Having been running an underpowered PC for quite some time I've learnt to be patient. I've just managed to migrate a clone of my library files into a new top end Mac mini with 16Gb of ram, and even though the media is back on a PC network share accessed over Wi-Fi, the Mac's copy of the library is much more responsive than my original.