If anyone cares, I think I have finally found a solution to the lag problem. It was driving me crazy, so just for the heck of it, I popped in GH3 and calibrated the lag on that and then used the same settings in GH:VH. So far, the game has been running a lot better and I hardly notice any lag at all. The game is still slightly disappointing (these menus are horrible), but at least I can get some enjoyment out of playing the songs now.
I don't know if my settings will working for anyone else, but my game is calibrated to Audio: 0ms, Video: 41ms.