Been having issues with lag when trying to do Shadow Lair runs, and had be trying to figure out how to regain latency.
Over all I use a Latency fixer, it simply changes a setting for the net to improve ping/latency by increasing data packets sent and received.

Playing any other games. MMOs, FPSs, or just privately made servers for indies and such. I get almost no lag. I cannot recall my specs, but I know they are much higher then needed for SK. As I play at max settings.

Now then. During my last SL run I was curious as to if Battle sprites were causing some lag issues, as whenever there are spikes you will normally see them teleport somewhere else then fly back to you. Throughout the SL run this continued like normal. Getting almost unbearable when fighting Vana. In the Void Passage I took my chance to unequip my sprite and noticed almost instantly the lag reduced. It wasn't a massive reduction, but still noticeable.

I only did this as I noticed Vana's fireorbs were doing the same teleportation as the sprites would do.

I did a bit more testing on this using Normal Vanaduke. Doing some solo runs and some full party runs. Again without my sprite equip. I noticed with each Sprite-less run I have better frames/ping/latency then when I had one equipped.

Is is possible there is confusion in the code regarding entities? Causing the game to freak out for just a bit as it sorts itself out? I'm not much of a code digger, let alone know Java yet. So this is just my guess.
But I do know that the sprites appear to have some involvement to the lag.