In case anyone else has had this problem, that was driving me nuts: seems that Macbook Airs have a serious overheating issue that causes the CPU to max out and disable.
The problem happens with CPU intensive applications like Video or Flash. In other words, ordinary web browsing can be difficult. Not all MacBook Airs seem to have the flaw, but a large number do (it may be to do with excessive thermal grease being factory applied to some, which messes up the airflow).
The solution is to throttle the maximum temperature at which your Air will run at 1600 MHz and to run the chip at a lower voltage (which reduces stability). This requires a $10 app called coolbook: downloadable here and using settings here.
Perhaps this causes warranty problems, and you may be asking yourself 1. why can’t Apple sort this out and 2. why do I have to do something like this anyhow, isn’t this a major design problem.
As regards 1, it looks like Apple don’t have a solution yet, so you will just end up wasting hours and hours dealing with them.
2. The Air is clearly a new and innovative machine. First generation, innovative design has a much higher chance of problems. This is why the Hubble runs a 386 Chip. When I was an architect, I worked for what is arguably the worlds most famous practice and at that time almost every building they had designed resulted in a law suit because the roof leaked. You would think that being able to design a building with a non-leaking roof would be a minimum level of competence required of an architect, but that misses the point. The architect was fully capable of designing an ordinary building with a non-leaky roof, but a truly innovative building increased the chances of problems.
Apple is capable of designing a computer that doesn’t overheat, but a laptop that fits in an envelope has increased the chance of problems. Of course, its a bit galling to be throttling your MacBook Air at a time when overclocking a MacBook Pro is making headlines.
Ours at work had this problem. A trip to the Genius Bar and service code “607-2476 THERMAL MOD W/FAN ASSY,ALT,M82” (ask for it by name!) seems to have sorted it out.