I'm using the standard launcher with no widgets.
I turned off wifi, killed Auto Memory Manager, and tried again. Same results. I tried changing the power management from overdrive to optimal, which lagged the game and made the input problem worse--it would actually do things for buttons I didn't push.
As long as it recognizes a button being pressed, it continues to recognize subsequent button presses. However, if a direction is pressed, then released, then another button (including the same direction) is immediately pressed, it has about a second lag before it is recognized.
My theory is that a signal is sent to the emulator when a button is unpressed, which must be interpreted before it can process the next signal request, thus forcing a lag. Though I found the same problem with Tiger emulators, so unless they interpret signals the same way...