One thing you have to bear in mind, certainly with more recent games, is the resolution you're playing at. My specs are as follows:
Intel C2D E7300 @ 2.92Ghz
4GB OCZ XMS2 DHX
512MB Nvidia Geforce 9600GT
I have every setting on the highest on this game, and i get around 35FPS, when playing at 1440 x 900. However, it is common sense that with a larger monitor, I would have to lower the settings to get the same performance. I don't know what screen size you are playing on, but if it is a large one, the increased number of pixels your computer is having to process may be the reason you are suffering from lag. Apologies if you already know of this, either way, it may be useful for others reading this forum.