By lag, do you mean like a hiccup in the framerate/sound every once in awhile? If so I only noticed this on 2.1, on the leaked 2.2 this went away. I even compared running Sonic 3 side by side on my phone and my kid brothers phone (he's 2.1 non-root, I'm 2.2 rooted) and 2.2 was significantly smoother and more pleasant.
Leave all the Audio/Video settings alone though. Shouldn't need to mess with that stuff to get optimal performance.