My performance was absolutely horrible last night so I popped open Performance Monitor. I noticed that two of my physical cores were running at 100% and the other two physical cores had a "Parked" status.
So it turns out that Windows 7 parks cores to save on power. Not sure how it decides whether to park cores or not but WoW was unplayable.
I found the following thread with details on how to disable core parking, requires registry changes, use at your own risk:
I am using KeyClone and all 4 physical cores are selected for the CPU affinity but I still got cores parked.