You should profile your app to see where you need to optimize. If the CPU is hogged, then yes turning off THUMB can make it slightly faster, but note that it can actually make it slower in some cases (as more program code needs to be transfered and due to limited memory bandwidth). You will also increase increase file size as the 32 bit instructions are obviously bigger than 16 bit instructions. If the GPU is hogged I doubt it will make any difference at all. If you don't see any performance increase, I'd recommend having THUMB on.
That makes a lot of sense. I turned Thumb off when my app was just a landscape and the LOD code was a lot less efficient, it made a huge difference. More recently I tried turning it back on and then off again and noticed a much less pronounced improvement. It's still a win for my game though.
Reducing the size of one of my functions seems to have helped. I'll still get stutters using threads on a 1G, but a timer approach works pretty flawlessly (albeit with some very minor fluctuations in framerate). The refresh callback in 3.1 gives rock solid results.