My personal lag problem is now solved.
Solution: I disabled the compatibility mode of the psclient.exe. See the image below.
When I first disabled the compatibility mode I had done something else (I can\'t remember what) which caused bad performance. I concluded that disabling the compatibilty mode was of no use to me. But I retraced my steps and again tried various suggestions found here in this forum. Finally, joyfully, this worked for me. I run WinXp Pro on an Intel Alienware system that kicks a55.
From chatting with many thoughtful players and reading all posts here on the subject I learned that there are several solutions possible to the lag monster (it\'s not really lag, many of us just all call it that). So, if you are reading this post and are ready to explode with anger try to stay cool because we\'ve been there, done that, bought the tee shirt and it didn\'t fit!
Just keep trying. Ask others what they have done. Eventually, you will resolve this problem. In my case it was not lag at all, it was the damn compatibility mode. If you truely have a lag problem maybe you need to talk to tech support at your ISP because the server that Planshift is running on is pretty good most of the time as far as I can tell.
Thanks to everyone who listened to me and said something intelligent back.