Well, if it's good enough to run COD4 then the only thing I can think of is that he's testing the performance with 19 AI in singleplayer, which will of course kill your framerates on anything but the best CPUs.
Also LFS doesn't make use of multiple CPU cores, which means it's especially suffering with modern CPUs that are basically all multicore.
The high CPU load in LFS comes from the realtime physics calculations.
May I ask are you running LFS as is or have you added any 3rd party texture packs?
what GFX card and CPU etc does your PC have and what gfx driver revision are you using?
from your first post it looks to me you are talking about FPS?
there are some things you can do to increase fps without loosing too much visual quality.
I have kind of a problem running LFS in my notebook.
It's an AMD Turion 64bits 2.0GHz single core, 1,5Gb DDR-2 and a shared memory ATI X1100 256Mb. It runs slow, but very very slow.
Running on XP, haven't tested yet with Win7.
EDIT:
When I meant that it runs slow, it is in single player with NO AI
Because then your PC has to do the complete physics calculations for every AI car you put on the track. If you want to test just graphics performance then you should pause the game, as that disables any physics calculations.
Just think about it, even just simplified:
Your car
Full resolution physics, calculate everything, everytime, everywhere.
Online competitor
High resolution physics (when close) or low resolution physics (when far). Some calculations can be skipped altogether as they're not relevant to be calculated on your PC using your CPU time (tyre heating/wear, for example, can be completely skipped locally and it would suffice to only send the results that the competitor's CPU has calculated over the network ~6 times per second or so). A lot of stuff simply doesn't have to be calculated or not calculated very accurately because it is not critical that you maintain a 100% correct state on your machine.
Repeat for every car that is visible. Invisible cars (on a different part of the track) don't require any calculations at all.
AI car
Full resolution physics, calculate everything, everytime, everywhere. Also you have to compute the AI itself - making it drive along the ideal line at the fastest speed possible with an arbitrary setup is not trivial!
Repeat this for every AI car on the track, no matter where it is located!
I hope this makes it a bit easier to understand why LFS is very CPU heavy, at least when using AI competitors. In COD4 most of the work is done by the graphics card alone. The physics for a first person shooter are hardly complex - the most CPU intensive thing are probably physics props (like LFS' movable objects) but even those only need to run at like 100Hz (compared to LFS' tyre physics that run at effectively 2000Hz) to give convincing results and you can take a lot of shortcuts. But if you do that in a simulator for the critical part that you're simulating (the car/tyres) then you'll just end up with a crappy simulation and there's no reason to bother with it to begin with.
That said, LFS could benefit a lot from parallelising AI/physics calculations by using multiple CPU cores. Once that's implemented you'd likely see a considerable performance gain on modern systems when running lots of AI (or having lots of other cars around you when online). Currently you're effectively running LFS on a single core 2.2GHz CPU.
That's your problem.
My 1.6GHz Turion (albeit an x2 - LFS isn't parallel threaded though so it won't make much difference) is more than enough for LFS, but the X1300 struggles a little. It's just about playable at 2xAA, but any more and it kills it.
Edit:
W7 is unlikely to give you any performance improvements, as you're graphics limited. Vista/W7 can help a lot when CPU limited.
I have a ATi Radeon X800 PRO VIVO 256mb AGP running with a Celeron D356 3.33Ghz single core. This was a dirt cheap setup (199GBP) brand new, and runs LFS fine with loads of hi-res textures and max graphics settings, full AA and AF at about 60fps average.
A while ago, I made the experience of changing only the GPU in my system (I think radeon x700 to x1950pro), and it had next to no effect on the frame rates. Then, when I later changed the whole computer, I gained basically an unlimited amount of fps.
Indeed a lot of the pressure is on the CPU because of all the calculations. You probably don't get any extra fps out of a GPU in LFS beyond a certain card in the hierarchy, and that's certainly not a radeon 5000.
On topic Android's answer is probably the most thorough answer on this subject I've seen here. This thread also contains some real world benchmarks in LFS showing the performance impact of changing various parts of the system.