The problem is that when you press control-s in putty, it does not save the file (not a big deal) but turns off the output. At first glance it looks like your ssh session is frozen, but you are still sending input through.
Pressing control-q will make everything go back to normal, but it is another keystroke that you have to memorize.
I ran across a comment to a blog post that worked out great. Just edit your ~/.bashrc and add the following lines below:
stty ixanyThe post also contains a way to map the control-s to save in vim.
stty ixoff -ixon
stty stop undef
stty start undef