It lags terribly, and I know for a fact its not my rig. It seems like its trying to catch up to wat is happening. any way to fix?

That's exactly what it's doing... it's like running a replay of the game to to the current point at whatever speed your system can handle... because certain aspects of the simulation are tied to things like the location and orientation of each piece of each model in play this can be very system intensive.

If you are talking about something else perhaps you can explain the issue in a more detailed fashion.

Is there anyway possible to make the game skip to the current action? Or is it something hard coded into the engine? As I said my computer is a decent computer:Core I5-460m, ati mobility 5650, 4gb ddr3 ram , and yet it still slows to a crawl

the lagging is the skipping forward to the current action.
It is like searching for a song on those old music cassete tapes:

To get to a certain song, you have to fast forward/rewind through the whole tape. It is how the engine works.

Very nice example, thanks