Thanks mrboni,
After hours of failures to run the Artnet code snippet with "Arduino Uno+Ethernet shield, using Arduino 1.0 and 1.0.1". seems like a serious UDP problem in Arduino.
When I took the code of Artnet example from:
http://vvvv.org/contribution/artnet-arduino-set-v2
and ran it on Arduino Uno+Ethernet shield, using Arduino 0.23,
things started working. Although it still seems that the arduino Uno hang after a minute or two.
I will try both versions of the code, on Arduino Mega.
Thanks!