My touchscreen was giving some issues and stopped responding altogether in a particular region, so i went in to the service center and my Galaxy R was repaired in about 30 mins. The whole LCD unit was changed.
And no such problems (reboots, hanging of phone) have been faced by me! I am on stock Indian firmware 2.3.5 (Latest here) and i have only rooted it, no custom kernel for me.
I'm going to take it to service center and from what i heard Galaxy R is discontinued so they will not have spare parts mostly and I will not get replacement. Only refund.
Sucks man, I loved my phone while i used it for 2 months - It was awesome. Tried different ROM's Kernels Firmwares everything. And then this problem comes up. Now its all gonna go back to Samsung. Adios Galaxy R.......