Seems like quite a few people are having this problem. I moonlight as a computer technician - this is definitely not an Internet lag issue, this is definitely a frame-rate issue. Needless to say, I'm experiencing it myself. Here's a list of my specs, for what it's worth.
Pentium IV 2.60 GHz overclocked to 3.12 GHz, Northwood core, passed 12 hour Prime95 test
1 gig of Corsair XMS DDR400 RAM (stock speeds and timing)
ATI Radeon X850 Pro, AGP config @ 256 megs of RAM, R-481 core, stock speeds
All drivers and firmware updated to latest versions as of March 9th, 2007.
All non-essential background processes terminated, including real-time processes / services (anti-virus, etc), running "Windows Classic" theme to conserve RAM.
I can't even get a dime's worth of FPS. The game appeared to be worth a look, but until something is done, the game is downright unplayable.
Hope this gets fixed soon.