Improving performance of HTC Magic
To answer the question - to speed that thing up you need to roll back to CM4 or another Android 1.6 based ROM.

I have a Magic and have used several ROMs including CMs 4, 5 and 6.  It is unfortunately hamstrung by its first-generation hardware - you simply are NOT going to get both features and speed from this phone, period.

Android 2.x ROMs do not make the Magic faster.  With all their config options they can make some things appear fast but this comes at the cost of performance in other areas.