When on med video quality, the game displays a minor fog effect over the area your knight is in. When the camera moves, however, the fog freezes in place. This looks like you have a wrinkled screen of plastic over the camera, and it's really bugging me. Either make it still animate while the camera moves, or remove it from med quality.
Here's a video example of it: http://www.youtube.com/watch?v=D9thRJ11xEY&feature=youtu.be
Sorry if it's kinda hard to see at that quality, I don't have the hardware to really make a good recording.
It will lag. Is the medium quality the shortest quality possible? Also this should go to Technical difficulties so the issue can be fixed