I thought LFS force feedback was generated at 100Hz, the same as the main physics loop. You can't really get it any smoother without running the physics faster or you wouldn't have more data to calculate it from.
Also, this is probably on par with the fidelity available on most wheels over USB (given that USB, by default in Windows, samples at 125Hz).
As for low frame-rate problems, I would imagine if your game was CPU bound (would need old hardware) then it may interfere with force feedback resolution.