High Registry Size (545-600MB) on Terminal Server 2003 R2

Unless your getting error loggings, the registry size should not be an issue.

"We've a lot of unnecessary printer drivers from HP etc. Is this causes system freeze issues?"

Unless you have installed HP drivers, with unnecessary software, such as fax, photo editing, scanning (resident) etc or have an old/buggy driver, HP software should not cause freezes..basically you should just have the basic print drivers installed. Personally I would never install the complete install for say an "all in one" printer , that is just asking for problems. On my servers I only install basic print/fax drivers.

Most of the time running low on memory or less frequently a driver bug causes freezes. Are these freezes recoverable or not?

The freeze lasts for few seconds to 5-15 minutes. And then come back. We first thought that something wrong in either Switch. Router. Internet. We changed everything including Verizon FiOS Internet circuit (ONT box)

However we have a dedicated SQL Server 2005 running on Server 2003 R2 x64. Out FAT clients receive "Connection Failures" from our vendor program which connected to the SQL Server database!

With two kind of problems, we can't exactly predict where the problem exists! The Connection Failures to the SQL Server several months back and it's automatically resolved by itself. After 6 months (no s/w or h/w changes in servers), it;s again giving Connection Issues.

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We tested Internet Test by directly connecting to Router, Switch and it gave 90% speed. However On any of connected servers including Terminal Servers, speedtest.net shows only 50% speed and sometimes even low!

How much memory do you have? Sounds like a low memory issue but could be a resident prgram or network issue causing delays .

Update bios and all other firmware related to you server.

Open up Taskmanger, sort on memory use, monitor services/programs which continuously increment memory use over time (from a reboot after the server settles down).

Bit of rambling....

Are you routing data over the WAN to other machines/server? Not referring to RDP access,. as RDP traffic is just keystroke and video updates. If you are not routing data, the router is a non issue, unless you have massive frame losses due to incorrect MTU settings on local (server) and the remotes (which could cause delays). As to the switch, you should have managed switches, as you can monitor multiple issues either caused by the server , wiring or wks; check each port for errors, more then a few errors per port per week may point to wiring issue, bad NIC driver or errant program (eg I remember old AOL versions set up on laptops for home use could cause massive network problems). Generally, poor wiring, damaged patch cords produced most errors, next bad drivers or really old NICs, last software. Also check port utilization, if a port utilizes an unusual amount of bandwidth, might be malware/virus.

SQL by default uses a good deal of memory, on ALL my servers using SQL I go into the configuration (studio, in your case) and limit it's use. Terminal server itself uses a good deal memory, I figure a starting point for a 64 bit TS is 8 gig, dependent on the number of users .

Check your MTU settings, again local AND remote, with a program such as "TCP Optimizer" ( server safe, reversible). Having the correct MTU setting on both ends is important, incorrect MTU can cause a great deal of frame losses (causing retransmits, equaling network delays and connection losses).

www.speedguide.net/downloads.php

Another suspect is resident anti virus software (memory use/delays), and it advisable to limit AV scanning of particular folders as recommended by Microsoft/and the AV producer, MS has a document with it's recommendations on the web.

"We tested Internet Test by directly connecting to Router, Switch and it gave 90% speed. However On any of connected servers including Terminal Servers, speedtest.net shows only 50% speed and sometimes even low!"

Assuming you tested a wks vs the servers. There could be 30 different reasons for this, including drivers,

NIC settings and the fact servers have many setting in the registry different then wks. If you have managed switch, try turning off flow control on all ports, if your wiring is good, this will increase network speed except on large networks. Test/set your MTU setting first.