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A client has a few hundred thousand products in Magento. Whenever client imports new products in (a few hundred each day), Magento needs to re-do the rewriting indexing. This is taking a long long time. Is there any way to speed this up, or just have it process only the newly imported items rather than re-doing the entire catalog?

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Is there a way to re-index only the newly imported items rather than the entire catalog? That would be much better I think. Old products never change anyways. - Pee Wee
What are your server specs? Magento version and how many products total? You can use the shell/indexer.php file via CLI to facilitate specific index rebuilding if needed. You may also want to read over Magento's Whitepaper: magentocommerce.com/whitepaper - B00MER

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Another option is to look at running a slave web server that talks to the same database. The slave server can do the reindexing (running with apache on 99% CPU) and write the modest amount of updates to the live server, not placing any load on it, maybe 2-3% CPU on mysql calls. In this way you get no performance problems on the frontend server.
Look at the /app/etc/local.xml file for the mysql connection and open up 3306 port on the live server. Then setup a development server to do the 'heavy reindexing'.