While the Netbook is not that powerful to begin with there is an odd lag I'm trying to figure out.

Specs:

APU Intel Atom 1.66Ghz
RAM 2GB DDR2 667Mhz ( single Ram Stick )
Toshiba NB205 Netbook
160GB HDD 5400rpm

Lag happens at Youtube and Facebook when navigating at those sites. No videos playing etc. But when you scroll up and down is when the lag is seen.

CPU use shows 40%-50% so I know that the CPU is not struggling.
Integrated GPU of the APU shouldnt struggle with simple SCROLLING up and down of these 2 sites.
Internet connection is fast 25/5 and speed test shows from NIC 23/4.7 running speed test.

Scrolling up and down in Libra Office has no problems.

Only thing I can come up with is that both sites use flash etc. But if the system was struggling with flash then the CPU should show its busy and its not breaking a sweat yet.

Performance settings are also set the the max on Netbook. There is a Toshiba utility where you can set it to be an electron sipper, but its set to max performance and least battery life setting.

Memtest86 run just to run it, and its good. Ran Passmark benchmark and it just shows that its as powerful as a Pentium 4 2.53Ghz.... which isnt that powerful, but I have a lesser powerful Pentium 4 2.00Ghz that has no problem with scrolling up and down with facebook and youtube.

Reinstalled OS fresh and problem still same. No virus's as well. and Video Driver is latest available for the APU.
Simple answer.: Intel as made a bobo and not confessing.

Source: many users on various forums complain bout the real world performance of the Intel Atom. Benchmarks seem to be good, but in the real world people see a perceptible slow performance.

As you said, there does not seem to be heavy loading of the core. Yet the common feature in user complaints is the Intel Atom. It is a wimp.

My REASONING. Look at this quote.
Quote

The Microsoft Surface 3 is a versatile tablet and laptop in one, offering an improved keyboard, a vibrant display and strong battery life.
- from laptop mag.

But if the system was struggling with flash then the CPU should show its busy and its not breaking a sweat yet.

Also, you don't mention a model number, but it might be relevant that since Flash is single-threaded, if the Atom is a dual core then the 40%-50% would likely be one of the cores being pegged at full utilization.