Take a look at the Network Window (F5 by default, I think) and see what it says for your CPU and Ping. That should provide some hints as to whether it's your rig or your connection to ICO. One thing you might try to do, assuming you have a dual core or multi-core processor, is to lock all processes to one core and to lock Sins to its own dedicated core and then give it High Priority.
I play on an older rig, a Socket 939 dual core Opteron 185 overclocked to 2.8 Ghz, and I set non-Sins programs to have Affinity for Core #0 and then set Sins to Core #1 and assign it High Priority. I generally don't lag much unless it's late game (1:15 in) and there are large fleets around. Normally someone else has CPU lag before I do. At that point I do close most of the other programs that are running on Core #0 and it seems to help--MagicJack and often Firefox.
