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This problem is addressed in ArcGIS 8.1 Service Pack 1. See the Related Information section to download this pack.
The desktop TIN building process is unacceptably slow when using densely sampled point data that is spatially sorted (e.g., north to south). Something that should take minutes ends up taking hours. Typical data that exhibits this quality is LIDAR.
This turns out to be a very bad input distribution for the ESRI triangulator. Every point that gets inputted ends up invalidating (retriangulating) an excessive number of elements.
If you have an ArcInfo license, use the workstation CREATETIN command or the ArcToolbox TIN Builder. These do not suffer a performance hit with this type of data.