I thought you were talking about net lag at the beginning, and indeed there's a bit of this specially when players connected reach an amount greater than 120 or so.
But no, it was just graphic lag...
I'll say here the classical tip, that Bereror gently pointed out, a lot of time ago... and that is certainly worth trying.
Probably, if you used now ctrl+alt+del to see the cpu and memory usage, planeshift is using close to 100% of the cpu time.
Here's something you can try to have a less "laggy" game experience.
When in game:
Go to options-graphics-details
You'll see fps cap there, at a value of 62. Lower it till 30.
Save changes.
Run around the world a bit, you'd see no visual performance decrease.
Check again your CPU usage, it should be now lower.
Let's see if this causes less lag for you.
