Which call of duty are you playing?
You listed your basic system specs, but more info like model number might be useful.
What I can say based on what you have revealed is that your system is underpowered, especially for Call of Duty 2.
COD2 requires a Directx 9 card, and an ati9000 is not directx 9 (ati really did a disservice with this card, because in the past the first number of the model implied direct version, but that was not the case with the 9000 and 9100 (not sure about 9200).
Also, a laptop typically uses shared memory for video textures, meaning that you are eating up your RAM that the game needs for other purposes.
With all your RAM, this probably is not an issue, but the videocard is the bottleneck here.
You also said LAG---are you referring to single or multiplayer games? (or both).
This could be an issue with network congestion. I am unfamiliar with this game....are the games hosted by the maker, or are they hosted by individuals...try a closer server