We have played around with the game settings and found that having your video settings on ultra (if you can) and raise gamma to max and lower water and texture settings. This seems to improve performance and prevent lag, while still making the game visually appealing to play. You can see what your frames per seconds are at anytime by pressing f8.
Another quick fix for lag would be to go to your settings and then simply re-apply them when your fps drops and you have lots of lag. If all else fails then you could continue to lower your video settings even further until your game is playable.