Home based minecraft servers are very laggy

Before I updated to the snapshot my server ran very well with 4GB of ram for me and 5 friends to play on. after we updated to the snapshot the server has been very laggy even with the 4GB of ram. I am not sure on how to fix this. maybe the memory is leaking? Also the server constantly crashes and im not sure on what to do about it

Steps to Reproduce:
1. download newest minecraftserver.jar
2. add java "-Xms512M -Xmx4G -jar minecraftserver.jar" to a note pad and save it as startserver.bat in the same folder your minecraftserver.jar is in
3. play on the server with about 5 people