I am using a CSO.

----Added 18/12/2009 at 7:35 PM----
I also had a CSO for the EU version of FTB1 and it did not connect to the EU server either.

----Added 18/12/2009 at 9:34 PM----
I have also figured out that when I toggle the server news using the Triangle button and then I press X with the servers news up, it also in a way freezes but I can still press home button to exit game and open up Nitepr.