So..
spent about 4 hours today adding a nice octree to my game framework. I'm able to render 100 models on screen at a jaw-dropping 15 FPS. Obviously the octree only helps if they aren't all visible.
Theres still the big question of why I'm getting such crummy performance, but I'll leave that for another day.
Maybe its time to look into doing Level of Detail (LOD). Hmm I wonder if anybody has done XNA stuff on that yet.. I'll have to check it out.
Hmm, how many polys does the shuttle have? The performance seems to be odd. You can always try to profile your code (although I'm not sure if it's possible with Visual Studio Express) or use nVidia's profiling and performance analyzing tools (providing you have one of their cards). Or maybe ATI (oh, AMD) offers similar tools.