Ok, so to amend my last update, I have:
3 - 60GB Launch Model - No lag
1 - 80GB Early/BC Model - No lag
2 - 40GB Recent Model - KZ2 lag/Warhawk & SFIV play differently than 60GB
A lot of people with launch consoles, I see. Could be a reason why most people were dismissing this earlier since it seems the majority (so far from my VERY limited study) have older versions of PS3's.