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How fast is it?

I would not suggest you put it in your sidebar for now. Depending on how many feeds you've used and the items in them, the first run (before the simplepie cache takes over) might take 10 or more seconds.

I don't seem to have caching.

In order to utilize the cache, make sure you have a wp-content/cache folder that is writable (755). See here

I don't get it. What is a lifestream and why do I need it?

Just check the Lifestream blog explanation explanation.

I want/need so-and-so feature

Patches are welcome ;)