Actually, it didn’t really freeze it. The reason for what I call “insane modal mode” :-) is on purpose for security reasons. When you start the CardSpace UI (icardagt.exe), it is actually invoking a private desktop, so is completely separate from your actual desktop.
It is pretty heavy on not letting you do anything. Watch your clock on the background, it won’t even move. What you are looking at in the background is actually just a bitmap capture of what your background used to look like when the CardSpace UI was invoked.
The security concept that we want to eliminate is allowing users to emulate the CardSpace UI in order to steal personal information, using this private desktop concept, it makes it much more difficult to achieve that.