You can't run the game (or most anything, including web browsers really) with only 1 GB of free drive space. I'm afraid there really isn't much point in discussing other ways to reduce lag until this is taken care of first as with or without the lag the game, other games and programs, and Windows itself are just going to keep malfunctioning that way.
How large is your hard drive to begin with and do you only have the one? The goal, if this is the drive also running Windows, should be 10-15% free space or if that can't be managed then at least 20 GB free; some seem to be able to get by with as little as 15 GB.