Needle in a haystack video performance issue

Wondering if anyone knows of any way to test or see if computer hardware or software isn't performing up to par. I have a decent system for the game I am playing and getting weaker results than a computer that is much older/weaker than this system.

I have used performancetest(details below), but it leads me to believe everything is fine. Just wondering if theres anywhere to go test 3d gaming and say... your hardware/drivers/OS are all configured right, its a problem with the game's installation. So I can focus on one or the other instead of trying to troubleshoot everything.

The game is a MMORPG, and I do have Cable 5000/384 through a router with only one other machine connected and he only does web browsing and web based flash games.

Have a somewhat weak gaming system:

Gigabyte K8NSC-939
3700 Athlon 64 San Diego core
Kingston 2x 1024mb PC3200 dual channel ram.
Geforce6600 AGP8x 256mb
Western Digital Sata-1 250gb hard drive, 7200rpm, 16mb cache
Sound Blaster Audigy sound card
Antec TruepowerII 430W Power supply
integrated network card
Plextor PX-708A DVDRW

Windows XP SP2 all updates except internet explorer 7
Avast antivirus with the game's folder excluded from resident and full system scans.(previously AVG, but removed for avast, no change)
Tiny personal firewall 2.0
Firefox 2.0.0.2 or 3 i think now.

That is all that is normally running when the game is running.

I also run FRAPS to check the FPS of the game.

Now on to the problem.
A friend with a 2200 Athlon, 1024mb ram, and 5XXX generation nvidia card gets less lag than me in game. This is with him having settings on medium, and me on low. Usually when i change settings from low to high, it doesnt affect fps at all hardly, its the same lag in low as in high.

I have lag when I view other people on the screen, or other models of players/enemies.

I don't really care about the FPS, as long as it stays above 30(under 30 and I actually notice "choppyness" and "lag"
In some areas, I get as low as 15-25 fps when others are around, when they leave... I get around 35-40.

The game is not that new, and isn't heralded as being a "performance system-only" type of game at all... only a memory hungry one.

I have tried:
removing any and all custom edits to the ini files of the game.
Reinstalling the video drivers(multiple versions)
Reinstalling directX
switching antivirus programs
turning off the firewall
turning off every part of the antivirus
resizing the paging file
and numerous other things to try to fix the lag.

I have PerformanceTest 6.1 and the computer seems to do well compared to a Pentium 3400mhz and a Athlon 64 X2 although the intel core 2 beats it like comparing a level 80 FF character to a level 20.
But I don't really know how to read out the performancetest data, just compare the bars to the other bars.

So do i need to reinstall the program and try to troubleshoot it, or simply save for a dual core machine because this one is way too weak?
The numbers from the intel core2 on performancetest are very... good. 300% increase over the other two machines and mine on most tests.

Sorry for the long post.
Basically just wanting to know where i might can find help with this.
I've been to a gaming hardware forum, but unless you have questions about a dual core machine with a 8800, they don't seem to want to help or possibly don't know what to say.

If you're having problem with lag in an MMORPG, perhaps it could be your internet connection?

Its possible I guess, however those with dial up don't lag terribly bad and I have 5Mbit/ 384Kbit Cable and it doesnt fluctuate very much.

Maybe there's another program on your computer that's draining your bandwidth?

Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\spoolsv.exe
C:\Program Files\Alwil Software\Avast4\aswUpdSv.exe
C:\Program Files\Alwil Software\Avast4\ashServ.exe
C:\WINDOWS\system32\nvsvc32.exe
C:\Program Files\Tiny Personal Firewall\persfw.exe
C:\WINDOWS\Explorer.EXE
C:\PROGRA~1\ALWILS~1\Avast4\ashDisp.exe
C:\WINDOWS\system32\wbem\unsecapp.exe
C:\Program Files\Alwil Software\Avast4\ashMaiSv.exe
C:\Program Files\Alwil Software\Avast4\ashWebSv.exe
C:\Program Files\Mozilla Firefox\firefox.exe

Those are the ones listed as running at the moment, and are usually the ones when playing.

Do you and your friend both have the same ISP?

nope, we do not. Friends are from another state.

Either the game has a problem with a specific component in your computer, or your internet connection isn't as fast as your friends.

You can both benchmark your internet connections with this website:
http://www.dslreports.com/speedtest

If your internet connection still runs fairly well, then perhaps you should ask the MMORPG's developers or ask in their forums instead.

It's actually pretty easy to determine if it's the v-card/system or the modem.

If the framerate is low, i.e. the pictures just run slower and it starts looking like a slideshow, it's the graphics card, or the ram, or the cpu...

If the game runs smoothly, but then you suddenly get your character reset in 5 metres behind or the enemies seem to teleport from one spot to another, it's the modem.

I've only seen one acception to this, being Splinter Cell Chaos Theory Coop Mode. There the modem problems looked like you having a weak system.

Internet connection on testing

4723Kbit/sec
364Kbit/sec

I've posted on their website but sadly they think its my router causing the interference...........................................

That is highly doubtful. Yes it is slideshow lag, not warping lag.
Only thing I haven't tried at this point is full reinstall of said game, or full reinstall of Windows. Unless someone, much like the topic stated, might know a needle in a haystack common video performance loss misconfiguration or something to that effect. Or a benchmarking 3d tool that isnt 500mb and costs money that I could try to see if the hardware is failing or slow at any point. However according to performancetest, it seems to be fine.

I'll try reinstalling the 4gigabyte game from scratch next, as it seems much like on the mmorpg forum, everything has been ruled out. It has to be software, right? If performancetest says hardware is reasonably good, and nothing was "dramatically" low, and the internet connection is fine... then... it has to be a misconfiguration somewhere.