I don't find Outlook 2007 to be slow but I have ample RAM. Try archiving some of them and they may benefit from compacting MS Support.
Outlook 2007 doesn't really do conversations but if you click on from at the top of the viewing pane then it will group all messages from a particular e-mail address together but this doesn't give replies too. There is a work round see Mimic Outlook 2010.
I find that if I type a name or part of a subject in the search box then it will indicate those message that contain the name, subject or even part of the text by highlighting or grouping messages together. The instant search is reasonably good Instant search and can be configured. by using the drop down arrow to the right of the search box.