Well... first, sorry it took so long to get back to you on testing CS on the wife's rig. It's not 7, per se, and it's not the 8600GT, or the fact that you only have 2GB of RAM. The wife has an Athlon 3700+, an 8600GT and 2GB. Using the nForce 4's onboard audio (updated drivers) the game ran fine.
Having said that, it could be the RAM as the wife is running 32-bit 7; you're running 64-bit.
We've yet to determine if you're experiencing video lag or internet lag? First thing I'd try is relphelp's suggestion. If that fails, run a game that has both single and online play... report back.