Julie -
Is the poor performance on client side systems only? For example, if you can find a way to remote into the Citrix box (Win2k8) using RDP, do you find the performance remains slow? Also, running Task Manager on the Citrix box, how many ArcMap.exe's do you see running? ArcMap is a pretty hefty product it is quite easy to overwhelm a Citrix server with only a few clients.