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[BaronHaynes]

The game (I own it on Steam) runs fine at the highest detail and resolution, no problems even when recording with Fraps, but no matter what I do, the interstitial animations lag like crazy.

Visible here - http://www.youtube.com/watch?v=9bitZBtr0xQ
(sorry about the squished resolution, it's a Windows Movie Maker thing)

No matter how low I set the resolution, the game struggles every time it has to display an animation like the chapter title wipes or Meat Boy's face when you exit to the map. The only thing that made a difference was setting to -ultralowdetail, but there has to be a better solution for this, right?

I'm running Windows XP SP3, I have a Radeon 5770, 3GB of RAM, AMD 2.2GHz processor.
I've:
-verified the Steam cache
-re-installed the game
-re-installed DirectX
-turned on VSync in my video driver program
-updated my video drivers
-tried windowed and fullscreen

And -ultralowdetail is the only thing that makes any difference. Any ideas?

[Zarkith]

-mediumdetail and -lowdetail aren't as extreme, try those and see if they also reduce the lag so that the game doesn't look like ass until someone figures out a fix. 

That's a really bizarre bug though, and I have a sneaking suspicion your ATI card may be involved. Just a hunch though, could be wrong.