[Yerun]

Last weekend my Lumia 800 experienced a total of 5 (!) hangs while browsing the internet with the built in Internet Explorer and listening to music via Nokia Music. In all cases the device had to be completely reset by holding the power off button for 8 secs.
The device is up-to-date with the latest software/firmware (but still running WP 7.5 - eagerly awaiting 7.8).
I have it for only nearly 2 months and already trouble. Looks like multitasking is not something the phone is handling very well. I found out how to delete the browsing history, but not how to delete IE temp. files (maybe a lot of temp files cause the problem?) 
It's disappoining that the whole device hangs (instead of only IE).

Does this sound familiar to anyone? I don't want to reset it back to factory defaults. Is there another way to remedy the problem?

[jimmyireland]

When you go to apps menu and scroll to IE and open it hit the 3 dots got to settings the delete history what does it say there???

And why dont you want to do a factory reset?

[Yerun]

@Jimmyireland You are right, I overlooked it I guess. So now the temp files have been deleted, hope this helps.
I don't wanna do a factory reset (yet) because I will lose all settings and data so only as a last resort I will do that. 
Thanks.

[LEDJPS]

Don't even bother with a factory reset. I had the same problem with mine and tried everything (including a factroy reset). Did not solve the problem. No response from Nokia. This is effecting many lumia 800's but nothing is being done about it !

[Yerun]

Ok, the problem is still there. In the meantime, I updated to Windows Phone 7.8
So, in conclusion it is best to close all other apps and just have the Nokia Music app opened when listening to music. This is really disappointing. 
I don't think Nokia will ever solve this.