You may be dealing with two separate issues:
1 - I've found Kontakt to hang/freeze with Reaper from many versions back. My workaround is to insert a VSTi host into the track (Phrazor in my case) and then insert Kontakt into Phrazor. No hangs after that.
2 - I've not tried to push the limit but I've had no problem with running 3-4 instances of Kontakt with 3-4 nki's per Kontakt (approx 9 - 16 nki's total), all with very smooth playback (P4 XP desktop). So it may not be a Reaper issue in terms of playback lag.
Good luck.
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