I've been trying to make my dosbox run Lords of the Realm 2 without lag while recording with Fraps to no effect so far. I've also been trying to have it not pause at all when I switch to a new window (when DOSBox loses focus). It now keeps playing music for about 30 seconds after I change windows but then stops. Here is my prefs file:

1[sdl]
2output= ddraw
3fullresolution= 1024x768
4windowresolution= 1024x768
5fullscreen= false
6autolock= true
7priority = normal,normal
8
9[dosbox]
10machine= svga_s3
11captures= C:\Users\Vas\AppData\Local\DOSBox\capture
12
13[render]
14aspect= true
15scaler= none
16
17[cpu]
18core= dynamic
19cputype= auto 
20cycles= max
21
22[autoexec]
23cls
24@ECHO OFF
25mount c "C:\DOSBoxPrograms\Lords of the Realm II"
26c:
27cd \
28L2D.EXE
29exit

None of these changes seem to have worked on helping me. I tried simple on CPU as well, I tried OpenGL in output but it lagged even without fraps running. DDraw is the only way to get fraps to see DOSBox.

As for my PC specifications:
http://www.asus.com/ROG/G74SX/#specifications
(i7, 4 slot with 8GB ram (using 2 slots right now))

1i7 2.2GHz (50% overclock to 3.1GHz)
2nVidia GeForce GTX 560m 2GB VRAM
3Windows 7 Home Premium 64 bit
48GB RAM

And I used whatever version of dosbox was downloaded today. So.... 0.74? Hopefully this answers all of the questions.

When I start recording with Fraps, the framerate drops to less than 19 to 21 and gets laggier and laggier.

So my 2 issues here are:
1. I want it to keep playing the game even if I swap to a different window.
2. Lagless recording. I should be able to do this since my laptop can handle anything out there...