Today we configured the repository in question. While generally everything seems to work, it appears to be quite slow.

Also SmartGit displays the following warning:

The repository has an error-prone admin area configuration.

For the repository the .git-admin directory is located at C:\GIT\foobar.git.
If the repository is not located on the same drive as the admin area, this will cause troubles for Refreshing.

Could you please elaborate on "troubles for Refreshing"?

Not specific commands actually. If SmartGit already supports .git files, all you have to do is create a nice GUI that

• moves the .git folder to the intended destination
• creates the .git file (if not already present) and
• configures the gitdir setting in the .git file.

Maybe a new tab in the [Repository > Settings] dialog?

Possibly. I am talking about `man git | grep -A2 '    --git-dir='`:

--git-dir=<path>
    Set the path to the repository. This can also be controlled by setting the
    GIT_DIR environment variable. It can be an absolute path or relative path to
    current working directory.

One way to implement this could indeed be a .git file at the repository TLD containing:

gitdir: ../foo/bar