Lag spikes are usually attributed to packet loss and connection problems, such as congestion, and could be hard to track. Do your traceroutes look normal ?
Excessive buffering may play some minor role, however, this should not apply to Windows 7 with fast recovery algorithms and TCP Window auto-tuning. What game ? Have you tried disabling Nagling (advanced tab in the Optimizer). Does reverting the settings to the Windows defaults have any effect on this issue ?