There are a bunch of scattered threads/posts on the topic, thought I'd make it easier to gather all the information in one place.
To clarify, in case folks hadn't noticed, the lag occurs precisely when either one of the manta-creatures or a flock of birds flies overhead. When this happens, framerate drops to nothing.
A work-around is to make a change to the graphics settings. The reason this works is it resets the overhead graphics as well. However, the next time the overhead flying background comes around, the framerate drops again.
The issue is with most ATI cards, but particularly bad with 9800 series. The game runs well elsewhere (except for the cutscene movies, which are awful), but essentially grinds to a halt on Dantooine.
Reported fixes:
--Add the line 'Disable Vertex Buffer Objects=1' to the [Graphics Options] section of swkotor2.ini file in your game directory. I'd suggest trying this first.
--Some users have reported resolving this by rolling back to the 4.1x version of the ATI Catalyst drivers. This goes contrary to Obsidian/LA's suggestions to upgrade to the newest drivers, but has been successful in some cases.
--Changing the graphics settings slightly to reset the display buffer. Works, but very short-term fix and must be done repeatedly.
Status of permanent fix from Obsidian, Lucasarts or ATI: none at this time.
If you find any other information or things that work to fix the problems, please post them in this thread.