I've got a 8400GS and it works fine for me. Not the fastest out there (its a budget card, so deal with it) but I've played Oblivion on 1024x768 resolution with Medium quality and suffered no lag.
I haven't really fully tested the card's DirectX10 capability (still using XP) but I ran the...
That can't be it. I have the same motherboard and uses a Pentium Dual-Core with 1GB of Kingston pc-5300 ram. It works fine for me, never any lag.
Check your ram by using a memory utility. If that doesn't work, try downgrading the bios by flashing an earlier version, though highly unrecommended.