I have had a terrible time with lag since the 1.7? release when playing other servers. Is anybody else having the same problems? I realize that Noobstown isn't here to help fix my problems with other servers, but given the delay, maybe I can get my computer running right for V6. My lag on other servers mirrored my lag on Noobstown V5.

If it's server issues due to the update (I think I saw somewhere that the server code had a major overhaul) then I guess I'll just have to wait for Mojang to fix it. My game will freeze at 0 FPS for 2-3 minutes at a time (rough in skywars type mini games) then return to 40-90 FPS.  The freezes aren't usually that bad, usually just a few seconds. I don't have any problems with single player or using this machine as a LAN host. I've played with the video settings in minecraft, but no change.

Computer specs: AMD Athlon II 4x800, 2G RAM,  NVIDIA Geforce 8500 Graphics card, Windows XP Mediacenter.  I know, almost out of date machine.

Looking at my description of the lag, it looks like the issue is with the servers, for the most part. Does this sound likely?

Well, as you said your machine isn't really that wonderful to play MC (or anything else really) but take into account that what you are experiencing is not lag.

Lag is entirely dependant on the server and on your connection.
If you see high latency it's lag, if you see low FPS it's just your machine being slow.

With MC the graphic card pretty much doesn't matter at all, unless you are loading higher quality textures.
The CPU on the other hand does most of the work and even a good one can be pushed hard by big worlds and lots of entities.

Even with a faster CPU, if the temperature get too high (~80°+) it will throttle down performances to avoid harm.

Anyway, if you are playing on 1.7+ servers with plugins right now, expect problems.

(I have no problem playing in single player, no optifine, 100% vanilla)

I have no graphics lag in any situation and have experienced minimal server lag on the plugin+population heavy server I play on. (No server lag at all on my friend's vanilla server.)