run them all of the same installation of wow. you dont get any performance benefits from running them on from separate installs.
get everything running right off of one install first.

Guess yer running vista? If yer running vista and have 4 gigs yeh will still get some lag in areas with lots of people/npcs no matter what yeh do

Did yeh setup maxfps to 40 and maxfpsbk to 5 ?