You can also, if you feel you must, increase the minimum frequency. IF the lag you're experiencing is CPU-bound (i.e. it's because the CPU can't handle something fast enough, not, say, because of SWAP and disk I/O bottlenecks).

Ideally it should still "sleep" at 0mhz when completely unused. The thing is the on-demand governor for the CPU only increases CPU frequency when it's pretty intensely used. So if the current frequency is 125 Mhz, it's not gonna go up tp 250MHz or whatever, until the CPU is 90% busy, or something like that. From there it's not going to go up higher unless CPU is still 90% busy, etc.