I've started playing on multiplayer so I can create more then one char. But using the spacebar for pausing is really annoying me because it never seems to pause at the right time there is always a delay and a delay to unpause. I know it doesn't sound like much but when your in the middle of a hard battle it can make alot of difference.
Does anyone know how I can fix this problem?

If you go to game play options you can set auto pause to a variety of settings that may help. I guess I have just gotten used to playing with the space bar, because I haven't had a problem with a delay.

Move your save folder from inside C:\...BGII-SoA\mpsave to inside C\...BGII-SoA\save and play it as a singleplayer game. It's a common practice to avoid just such a problem. :)