Yeah it is a hardware issue I only have 2GB. If I restart my laptop is fine. I can't wait till 7.2.
I have a 2GB Mac Mini that was recently upgraded to Lion from SL. I see very little performance difference between the two, even with the limit RAM.
I will say that Safari has problems right now, where it does not properly release RAM. Over time this does cause some trouble. Until this is fixed, I am using Chrome as my browser on that machine.