Well considering Sins mostly runs on one core and can only use 2GB of ram, you are probably just maxing out one or the other. The number of players and fleet sizes are more important to know, as well as what version of Sins you have.

Opps my bad you but Entrenchment in the title lol. Well with almost any PC you are going to have a bit of performance issues with seven players at near max fleets. With Entrenchment RAM is probably the limiting factor (it sadly can't use your full 4 gigs), so try reducing your graphic effects and disable needless UI options like trade ship icons etc. Is your friend also having issues?

Its a 32-bit issue. Applications that are 32-bit (such as Sins) can only use 2 gigs.

Operating systems can yes. The Applications are limited to 2 gigs.

If ram is the problem why does it never use the full 2 gigs?  my PC uses about 1.6 gigs to just run the stuff I run in the background (Vent, Hamachi, FF, OS, etc) and I only use 2.9 when Sins is running.  So sins is only using 1.3 gigs.

Also if the problem is my ram and its being kept under what my computer is capable of and my friend is also artificially caped at the same point why does he get twice my FPS?

The speed of the CPU can also cause issues. The faster the individual CPU the better performance. Your friend may have a faster CPU.

As far as the faster CPU ... that doesn't explain the huge discrepancy. if he was getting 2x my FPS fine, but he is getting 5-10x.

We have at most a 2-3x discrepancy in FPS in other games if that.

Updated OP

So anything below diplo is just unplayable on a map with more than 4 players?

Also its a lan connection over Hamachi not that it matters because I get lag in single player too.

Let see, 2.23 GB ram ( 2283.52 MB ) used for OS/application, 1791 MB ram used by the shared video memory... 2283.52 + 1791 = 4074.52 MB ... seem that you are using your full RAM !!! The memory that is reserved for graphics is taken away from the total system memory...

If you have a dedicated graphic memory of almost 1GB, why do you need to use shared memory for extend it to almost 2.8 GB of display memory ???

Your system become so short in memory that the pagefile system begin to be used... remember that disk access and read/write is slower that RAM...

For resolve your lag, try something like ( if you BIOS allow to change the amount of shared memory ):

Display Memory: 1016 MB
Dedicated Memory: 1016 MB
Shared Memory: 0 MB
 

It will free 1.75 GB of the main memory for your application/OS...

A other thing... 2283 mb ram used, where 623 are for the game... so, without the game, already 1660 mb are used !!! My laptop with Vista x64 is using only 787 mb... my desktop with XP pro x64, a little less that 250 mb... seem that you have a lot of crap running on your computer !

From http://en.wikipedia.org/wiki/Shared_Memory_Architecture 

"In computer architecture, Shared Memory Architecture (SMA) refers to a design where the graphics chip does not have its own dedicated memory, and instead shares the main system RAM with the CPU and other components.

This design is used with many integrated graphics solutions to reduce the cost and complexity of the motherboard design, as no additional memory chips are required on the board. There is usually some mechanism (via the BIOS or a jumper setting) to select the amount of system memory to use for graphics, which means that the graphics system can be tailored to only use as much RAM as is actually required, leaving the rest free for applications. A side effect of this is that when some RAM is allocated for graphics, it becomes effectively unavailable for anything else, so an example computer with 512 MiB RAM set up with 64MiB graphics RAM will appear to the operating system and user to only have 448 MiB RAM installed.

The disadvantage of this design is lower performance because system RAM usually runs slower than dedicated graphics RAM, and there is more contention as the memory bus has to be shared with the rest of the system. It may also cause performance issues with the rest of the system if it is not designed with the fact in mind that some RAM will be 'taken away' by graphics."

The base usage of ram includes having a bunch of stuff open.

Hey I just got it to use 3.2 Gigs of ram for 2 copies of eve, along with other things.

I'm pretty sure they mean that they meant that if it is being actively used for graphics it can't be used for anything else. If not it shows 4 gigs installed so that would make it flat out wrong.

I appreciate that you are trying to be helpful rather than just telling me that you don't have this problem.

Honestly, I have no idea. I haven't heard of something like this before.  My only suggestion would be to contact support@stardock.com and they'll help collect more info to try and track it down.

Can someone actually help with this?  Now that the new diplomacy update is out, I also get a -30 frame-rate drop about 1 hour 45 minutes into the game.

IGNG even has problems auto-placing structures.  At that point, the game can easily be considered unplayable.  It's weird that adding a second monitor to watch movies causes no added drop in frame-rate when NO NOTICEABLE change in a round of Sins can cause an instant -30 frames per second.