intel atom n270 1.6GHz (or so at this point this is what CPU-Z and the docs are telling me

1GB RAM
Windows XP SP3
the problem:
any time I use my netbook, I notice this constant... lag then everything comes back. I've downloaded speedswitch xp and cpu-z to try and discover this problem, and apparently my CPU likes to go from 1.6GHz down to 800MHz, even at some points at odd numbers reported by speedswitch like 400MHz, 500MHz, 1100MHz, even 1300MHz!!! it's so bad that sometimes when I even type in a text box (as I'm doing for this post) all my words that I type won't show up, but after a few seconds it will. I notice too much lag/slowdown when I play movies, do some light gaming, watch youtube, etc. It does this regardless if the thing is running off the wall outlet or the battery.
I understand netbooks were meant for web browsing, but my god even a 1.6GHz 1GB RAM system should NOT be exhibiting the symptoms I am describing, especially during light web browsing.
can anyone help? thanks.