whats your pc specs/ what soundcard?
How are you plugging it in? HDMI? if so you got further then I did. I dont' get sound from hdmi only video. Why not just use the onboard sound card?
lag only with video? dunno, maybe you can downgrade the dom0 kernel?
to throw some other ideas out there, check bios settings, maybe disable the other card. have u turned off hardware accel in the browsers? html, flash.