If your system is reverting to using the Basic Display Adapter for graphics rendering, that could explain all the lag, as could switching back and forth. The fact that the GPU driver isn't being used all the time means that the driver isn't working correctly, and the driver not working correctly can cause lag even when it is in fact being utilized. The most common cause of this kind of error is a corrupt GPU driver, although it can also be due to a problem with the card itself, or with something else on your system.
The usual approach is to clean uninstall and reinstall the driver, but it would be better to check for other potential issues first. To cover a lot of information at once, please post a dxdiag. Hit Windows key-R, enter "dxdiag" without quotes, let the scan finish, click "Save all information," and save the .txt file to your desktop or somewhere convenient. From there, you can post it on pastebin.com (the free version is fine) or upload it to some other filesharing service. It'll be too long to copy and paste into a post here, and we really do need to see the whole thing.