I was getting the unplayable lag thing too when boxing with either WINEQ, EQ Windows or just EQ alone. (Geforce Ti 4200)
I changed my graphics aperture from 64 to 256MB in the BIOS as suggested by Lax. Well it worked (sort of)! Lag has gone but now WINEQ crashes. Fortunately EQ Windows still seems to work OK so I am using that.
Unplayable framerates
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