The last time I played Magicka was in August of 2011. I could get as far as that town after you fight on the flying ships, but then, for no apparent reason, the game became super slow. I did some research and found out that it was because of a giant memory leak. Has this been fixed yet?
This s the first time I'm hearing stuff about a memory leak.
Have you tried playing again? Could have been something besides a memory leak. The games been patched several times since August.
Please also post your system specs and a dxdiag report so we can track the issue down.
/s