This is correct behavior, and it has always behaved like this.
RO clients typically use between 250 and 500MB of ram, usually closer to 500MB.
As with many applications, they use less memory when they are first started, before the game has cached all the common resources. As you play the game, memory usage will initially increase and then plateu somewhere around 400-500MB (though I've occasionally seen it go over it).
I do not think the memory usage is related to the lag you have seen while watching video with the game running, particularly since I've been playing RO for close to a decade, and the memory usage has always been in that general area (it slowly grows, due to new content being added), yet you report that the problem is new.
Lag caused by memory usage manifests as long delays while starting or switching between programs, as it "pages" or "swaps" data between RAM and disk, during which time the harddrive light is on and you'll hear the harddrive grinding furiously. This doesn't sound like what you cite, though.
I suspect that your computer is a laptop, and is overheating. RO does load the CPU fairly heavily, and is pretty good at bringing out overheating problems. When laptops overheat (which is considered part of normal operations on a mobile computer - desktops usually handle this less gracefully), they will dramatically reduce the speed of the CPU, so it generates less heat - this will cause lag. You can test if this is the cause by letting the computer sit (turned off) for a few hours to cool, and then starting it and seeing if the lag appears immediately (indicating another problem) or only after RO has been running a while (suggestive of overheating issues). If it seems like the problem is overheating, the fix is easy - get a can of air duster and (with the computer off, ofc - and outside unless you like dust inside), alternately use the air duster on each air vent until no more dust comes out.
Edited by DrAzzy, 22 April 2014 - 10:39 AM.