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I am also interested in which real-time news feeds people are using.

Why do you think it's a bad idea? For certain types of trading it would do just fine.

What kind of algorithms are you thinking of? How much are you willing to pay?

If I had to use Java, IntelliJ would be my choice. http://www.jetbrains.com/idea/

This is a problem with your environment, not IB TWS. How much available RAM and which processor is in your computer?

There are many software programs that are designed to work with the IB API. See their marketplace: http://www.interactivebrokers.com/en/general/poll/ibconsultants.php?accept_disclaimer=T&ib_entity=llc

Honestly, If you are asking which programming language to use, then you are probably not ready to write your own trading system.