I will continue to dig in, but I beleive the new drivers have helped quite a bit.
Instead of 5-10 seconds of stutter, I am now just experiencing a second or two, and it also seems less frequent. I updated the Network drivers, and also went out and got the latest ATI drivers for my video card.
The latencies still being reported are shorter in duration and also not as high.
I will selectively disable components and find out which drivers are the potential culprits.