I am running Win7 and I have a screen freeze of six or seven seconds when I take a screenshot.
As a test with my "Reduced UAW160V5" installation I re-named the "Screenshots" folder and ran the game. I was able to take a screenie, with the screen freeze, and when I had finished playing I checked the "Reduced UAW160V5" folder.
As I expected the exe had created a new "Screenshots" folder, and the screenie that I took was in it.
The screen freeze even happens in EAW1.2 irrespective of the key that I set for Screen Capture, so it is a problem with both of my Win 7 installations