So, what's the current status on the sim lag?

I heard someone (who I shall not name in case he/she wishes to remain anonymous!) tell me that a bug in 1.7 was causing heavy server stress for clients looking (loading) objects.

I mean, in Lusk I get HORRIBLE GUT WRENCHING lag. Like, my avatar jumps backwards in lag, and moves like he's in a vat of molasses... walks very slow... plus I get around 5 frames-per-second.

So, I flew directly over the border to Lusk. Ching. Gameplay resumes to my norm of about 20 frames-per-second and server lag becomes normal. My avatar no longer moves slow at all.

Now, I know folks will say this is just because Lusk has a lot more people/objects/textures/etc in it, but I cannot accept that. Prior to 1.7 I could fly in Lusk like any other sim. Sure the main platform may have lagged me a tad, but leaving the platform un-lagged me for the rest of the sim. Now, however, the bounds of the sim are laggy, and leaving the sim returns gameplay to normal.

I also get random crashes while in Lusk now, which never happened from August '05 until the 1.7 update.

Does anyone know if this is a grid-wise problem and if it's being worked on? My source (who I shall not name in case he/she wishes to remain anonymous!) says that Linden Labs already knows about the problem, and is working to correct it...I believe this person, but I would like to hear what others have to say as well

Also, don't confuse this with a 1.7 whine thread, because it's not I just want to get to the bottom of things and see if things are being done to get the grid back up to its full potential =D
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Image #1 shows the Lusk sim (See stats in upper-right corner!)
Image #2 shows the Perry sim adjacent to Lusk (See stats in upper-right corner!)

[EDIT] Excuse the ugly green on the Lusk image - I blotted out players' names for the sake of their privacy.

UPDATE: Ok, well I went to Lusk today, and the sim seemed stabilized. Time dilation sat at about .98 to .99, and the Sim FPS was at 45 or so, leading me to believe the sim was patched or repaired by Linden Labs.

My client, however, is still getting the same amount of FPS, but this time without the sim-induced lag and slow moving. Now, it seems, my problem is client side.

But how could this be? Before 1.7 my client could perform marginally well in populated areas, now, it seems, my client drops to 4 or 5 frames per second whenever I get close to a group of two or more people!

Is this a problem with my computer, or is 1.7 still not worked out completely? =D

Thanks.