You hit the nail on the head, if all I'd ever used was my D1 it would be fast to me. But anyone who's used both and still claims Android isn't laggy is either lying or they're one of the people who can be on a 10 year old LCD with a 20ms response time and not notice the lag. I've never said my D1's slow, but with the max OC it's still not as snappy as my 1g iPod was. We're not talking the latest or even the 3GS, I'm talking the 1st model.
Well, it's not exactly optimized.
Are you running a custom ROM at all, besides having the device rooted and OC'd?
Stock Android, at least as handled by Motorola, isn't exactly fit to the device like a custom glove. It's supposed to be, but for some reason they slacked on their duties.
Cyanogen Mod has a lot of deep customizations and tweaks that have been produced by various groups using the Android Source itself, as well as utilizing more specific tweaks that truly take advantage of every drop of performance the phone's hardware will allow (so, in a sense, almost like super-evolved drivers for the hardware, in comparison to the fairly minimal and less-optimum code at stock).
CM itself, as well as moving away from the stock Android Launcher, was alone enough to bring the UI into a realm of smoothness that stock couldn't even imagine.
Granted, I said smooth - not perfectly fluid. No software and hardware configuration can achieve that with GPU utilization.
However, considering how much more potential Android as an OS offers over iOS, I'll gladly sacrifice a little bit of fluidity in the UI if it means there is more to offer everywhere else. Which indeed is the case.