Please help me understand #1 - Foam and the Shuttle

My basic physics education taught me that a ham sandwich dropped from
the Empire State building could do a lot of damage when it hit the
ground. I had thought that was to do with it's speed attained
through acceleration due to gravity. Now, surely, a piece of foam
(less than a kilo?) coming off of one component hurtling at thousands
of miles an hour, and hitting another component travelling at the
same speed can not do any real damage? But it obviously does.

So, is this because in the time between it falling off and hitting
the other part, the acceleration has been such that there is in fact
a significant speed difference? Or is there some other factor
involved that I am too dumb to see?

And, while we're on this topic. Did this used to happen to some/most/
all Shuttle missions, but only became an issue after Challenger? Or
is it a new phenomena? And, in the intervening period, surely, they
would have mastered the art of ensuring that they can keep the foam
from falling off?

UPDATE 9/8/05:
I've now read up quite a bit on this. I've found out that the foam used is quite a bit heavier than, say, styrofoam used in coffee cups. It's about 5-10 times as dense for instance. The piece that came off was about 2kg. I've also found out that it was travelling at a speed of 500mph (I presume this speed is the RELATIVE velocity). So, I guess 2kg at 500mph could be quite an impact. I'm not sure how that relative speed happened but I think a theory one possibility mentioned to me is as good as any - deceleration relative to the shuttle itself. Also, I guess with fluid dynamics the piece was probably spinning and heading in a different direction by the time it hit (ie the shuttle didn't just come up and hit this floating piece of foam).

Also, where it hit the shuttle seems to be important. If the damage was done around the leading edge or to a particular bit that allowed gases in, then the shuttle's vulnerability was a lot more.

I also found in the past, NASA had observed a lot of this insulation foam coming off, without real incident, so it became accepted as normal and non-dangerous, when in fact they had perhaps been lucky because it had never hit the vulnerable places.

If you've got a spare hour or two, you can find out more via wikipedia, and also at
http://www.io.com/~o_m/clfaq/clfaq.htm