Steam normally isn't THIS slow. Anyone else experiencing this strange phenomena?

That happened to me a few times. Turns out my Microsoft Security Essentials was the reason behind it. Disabled that and now I have no problems during first-run installations.

Check your virus/malware applications, maybe disable them during the installation phase.

http://store.steampowered.com/news/4638/

I've got avast! but it's turned off currently.

Although it does look like Steam switched my source server from Los Angeles to some third world country for some reason. Wonder if that has anything to do with it.

Oh you're having trouble downloading it? Don't know about that then...

I see what you're saying, Lackoo - they're swammped with people downloading this update.

I don't understand why Valve can't imptove their content server park .F...ing slow downloads after each steamworks game release .

You have to say "Seven hours later..." in that weird stereotypical French accented voice like in SpongeBob then your game will magically download, install itself along with the latest patches, and it will be better than Gothic 2.

I would try other download server locations. It sucks that you have to reboot the client when doing this. This works very well on game release and patch distribution days. Keep in mind the server doesn't have to be close to get good speeds. I normally use servers 500+ miles out during high traffic.
LA is one of those servers that probably gets heavily hammered during high traffic due to the population density there. A good example of a smaller metro type area with universally nice infrastructure is Charlotte, NC. Given that its a banking hub, fat pipes are plentiful and the population density is no where near the LA area and what it servers.

It happens every time something populair is released or on sale.
During the last Summer Sale I often couldn't even start the download because the servers were overloaded. They're a victim of their own success ;)

Actually, after playing for a little bit this morning, THIS is what Gothic 3 Should have been. If a game can look this good and still run smooth on my old rig then I now know the slide show that is Gothic 3 isn't due to my system being under par.