As MageTank stated, there are several resons you guys could be experiencing lag. Still, not even torrenting you should have those pikes. Try formating your PC, if that is a bit too complicated for you, try cleaning it a bit cos most likely you have something using your upload bandwith, spyware maybe?
Also check if your ISP has some kind of limitation to the constant usage of it. You can do that with an easy call to those mofos (isp guys are never good persons, never).
Ijs because I have the shitiest connection ever, I'm really far from the server and I play while skyping and mcing up to three accounts and at most I have 2.5k which isn't good, but it isn't that bad...
If you are sure your other programs work fine, prolly is your ISP limitating your bandwith, check it.-
See ya~