Hi guys.
The 'lag' at the minute seems to be caused by some sort of memory leak. while OOO fixes this (and other issues), the temporary work around i find that seems to work (in windows) is the following:
1) at the start of every level, press CTRL+ALT+DEL.
2) bring up the task manager.
3) find java.exe listed under the processes tab.
3) click end process - this quits the game, but the server saves where you are in the level, you dont lose mist/heat etc.
4) restart spiral knights - it will load in the same place you left off and you can carry on playing, without the lag.
This process basically just refreshes java, getting rid of all the crud that it has accumilated. The server just thinks you disconnected and waits for the reconnect.
I recommend to do it at the start of every level, because you are at no risk of getting killed there. You can do it at any time, just try and make sure you do it at a time where you will not get killed by monsters that could spawn.
If you have a more powerful computer, you can do it less often, However, id like to note, i have 4gb ram, the game starts to become unstable when java.exe reaches about 700Mb, and becomes completely unplayable at 850Mb. So, to keep it 'fresh' restart earlier rather than later.
Hope this helps, if you have any other ideas, keep em posted.
You are being helpful.