I'm in a similar situation to you, although I'm on UK T Mobile network. I used the same update for mine from the HTC link (ROM Upgrade for HTC Hero) and although it got rid of the lag it limited the number of apps on Android Market and I can no longer download paid apps.
As far as I know most networks are sending out Donut OTA at the moment, some people have received it, most haven't yet. It will probably be uploaded to the HTC side soon so it can be downloaded as well. Android market's been upgraded in donut so it should hopefully sort that problem.
