Hello AndyBE,
I tried running your example and it appears that even though the event structure is not running, it is still trying to handle the event. Since the default value is to lock the front panel during the event handling, it results in a frozen UI when the event occurs.
If we use LabVIEW 7.0 or later we can prevent this by selecting the lock front panel option when creating the value change event.
The other option we have is to use the mechanical action "Switched when pressed". With this action we will need to manually reset the control to guarantee the button is false during the next execution. I have attached a modified VI that shows how to do this.
Regards,
Matt F