Any mmo's going to be laggy in high pop areas. Not really much that can be done about that until gigabit internet access finally makes its way over here, and is affordable for the average consumer.
If your screen is chopping, it's probably not lag, but either your video card, or memory. On my desktop, I've got an ATI AIW 9600xt with 128 ram video, and 1gig pc3200 ram... never have any chop in high pop areas, runs at a fairly stable 45-60fps. However, on my laptop, I've got an nVidia GeForce 6800 with 256 ram, and 512mb pc3200 ram... I'll hit 1fps or less, constantly, when I enter the central market area in Orgrimmar.
Friend of mine had the same problem with his desktop. Upgraded to 1gig of ram, and problem solved. I'm already scouting out prices on a gig of ram for my laptop.
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