You have 2 major sources of lag for WoW from a hardware perspective, but there are many in-game settings that can affect your fps and perceived lag.
2) Hard drive access speed
Are the 2 hardware resources that are used most out of WoW.
CPU is minor since the majority of it is used when decompressing their file data into memory, after that its all ran out of RAM based upon geographic areas in the game. I can play the game on a 1Ghz P3, and a 2.4Ghz P4, and they play very similiar, since the hard drive setups, memory, and video cards are all high performance products.
WoW uses progressive file loading during game play, which taps your hard drive, especially when loading into a major city like Ogrimarr where there are a ton of people, textures, and models to load.
So the biggest increase in performance you will see would be those 2 items. The next step would be to start reducing in-game options. Reduce your texture quality, and antiscopic filtering, things like that, then see how it plays out. Of course try these before upgrading hardware, since you can do this for no charge. The question is how much image quality do you want to suffer, in order to receive better game performance.