When I'm uploading files to multiple people, one upload seems to take over all the rest. I'll have 7 people trying to download things but one will be maxed at 38KB/s and the rest will be sitting at about 0-1KB/s. Is this the way Limewire is supposed to work, or is there someway that I can fix this?

I'm on a cable connection capable of about 600KB/s download and 40KB/s upload.

Drop to one/three slots per person. It's a personal concept of whether to give good speeds to a few or small but acceptable speeds to a handful. Also set a maximum no. # of uploads. Such as 3-5 depending on your upload bandwidth per person prefered, etc. These settings are in your options: LW's menu bar, Tools>Options>Uploads x 2