I liked the idea of the game but the game itself is lacking in allot of areas.
For one not getting penalized for holding down a button or hitting the wrong button before a arrow comes up kind of makes this game easy mode no matter what.
You should look up step mania if you haven't heard of it, it might be better to make a actual game out of this then a flash game that people can download on your site.
As for the quality i also agree and i am on a 3.0ghz dual core with a pretty good graphics card.
There isn't any reason why the game should lag when you get to fast areas.
But overall it did make me wish there was something more to this game it has allot of potential and i feel your game is in the early stages of something great.
I think a few things should be added to give it a better more competitive feel.
One thing i did love about the game was the headbanging feature but i feel it's over used and should be used for either powerup points like in guitar hero or solos.
Adding a countdown when you're about to go out of headbang mode would be nice as well.
Another thing i feel is a must is multipliers. Simply stopping at 11 is kind of a slap in the face i think everyone wishes to see high numbers aka every button they hit correctly.
And what fun would multipliers be without animations?..
20 chain metal fingers, 50 chain metal face, 100 chain bite the head off of a bat and headbang with a spraying headless bat in your hand, 200 chain head shoots off blood sprays, 500 combo redblood changes to rainbow, 1000 chain you grow wings and float, fail chain simply a sadface or falling to the floor then standing back up with his head back on.
I hope you continue with a headbanging hero 2 because this could be something great.