It's do to the amount of graphics your memory is trying to process. While your memory card has more than enough memory to handle everything it still has to go through your system memory.
I blew one of my 512 dimms a few months back which dropped me down to 512 total. The more on-screen graphics the worse the lag gets.
Try this to be sure. Turn off, or to the lowest setting, all non required in-game graphics and play like that for awhile and see how the lag is. Then turn them all on, or to the max setting, and play like that for awhile. See if you notice a differance. If you do, upgrade your memory.
While I agree with highRfrequenC that memory is one of the easiest things to install, it is also one of the easiest things to ***** up and one of the worst things you want to ***** up.
If you look at the memory stick you should see a notch in the bottom of the memory. You will also notice that while it's in the middle it's not the exact middle. Look at the memory slot on your motherboard and you should see a bump in the slot. Make sure the bump and the notch line up when you put the new memory in. You should also see a latch on each side of the memory slot. Each of these latches should have a small bump on them as well. The new memory will also have a small notch on each end of it. Again make sure these bumps on the latches sit properly inside the notches on the new memory. If they don't your memory probably isn't seated properly, which can cause alot of problems.
1 last thing and I can's stress this enough. Make sure your getting the proper type of memory for your computer. Best bet would be to write down exactly what you have (should be a small sticker on the one already installed in your PC) and take it with you when you go to get your new one.