Lag from low FPS and sluggish movement built into the game engine, are two completely different things. In LOTRO, every time you begin to run, you first start off slow and quickly build up to run speed... kind of like real life where people don't burst into full sprints every time they move from point A to point B. I find the realism to be annoying because, as with any MMO, I'm constantly starting, stopping and then restarting movement, and it sorta falls into the uncanny valley -- While the attempt at realism is appreciated, it's really just weird, annoying, and makes the game feel sluggish.
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