I run a gaming company that hosts an MMORPG which I am having a lot of lag issues in game. The server itself is not being strained by the amount of players yet we are still having these issues.
The game is hosted on a dedicated server with a Intel Q9550 QuadCore 2.83 Ghz CPU running Windows 2003 x64 and MSSQL 2000 SP4. There are 8gb of ram on the server and according to the task manager the server does not exceed 3gb Ram usage, 10% CPU performance, and 5% network usage while the game is running. So I do not think that we have an issue with poor hardware.
I think the issue may lie in the sql as I have been seeing a few errors such as "Microsoft OLE DB Provider for SQL Server: Lock request time out period exceeded." and "Deadlock" errors as well.
PM me for more information. I can send you the download link to our game client (983mb). I am willing to create you an account for testing purposes. Knowledge of this type of game is very helpful.