I haven't tried Project Elite, but I would question if it was an issue with the amount of memory the OG Droid has. I've had success speeding up CM7 by activating the "Lock home in memory" option (Settings -> CyanogenMod Settings -> Performance) , though this is obviously at the expense of the total amount of memory available. Check to see if there are settings for disabling cosmetic improvements in the OS specific to your launcher/ROM?
Also look into overclocking, I'm set at a maximum of 800 MHz right now and it seems stable to me, with no real noticeable decrease in battery life. The way I did this is fairly unsophisticated (settings in CM7), and I'm sure you can attain better results by loading a custom kernel (low voltage, ultra low voltage, higher clock speeds).
Lastly it may have to do with your SD card, is it fairly old? If it is, it might have a slower access time and slow down your applications. Also the number of pictures can have a big impact.