Sounds like you've tried some of these, but go through the list and check.
a. Install the Priority Script
i. The Priority script that ships with ArcPad allows us to modify the priority of the thread that�??s doing the redraw. The script is installed in: Computer Drive with ArcPad Installation C:\Program Files\ArcPad 8.0\Developer\Samples\Applets.
ii. If you copy the script to \Program Files\ArcPad\Applets on the geo and restart arcpad, you�??ll see a little extra item in the tool bar �?? looks like the ArcPad logo. Activate this tool bar and click the one icon that appears to run the script.
iii. Then change the drawing priority from �??abovenormal�?? (the default) to �??normal�??, hit OK and quit ArcPad.
iv. Restart Arcpad and the new setting will take affect. The change allows the GPS to keep working during the redraw.