Cisco Linksys E1000 - Lag Spike about every 10 seconds.

Hello,
Hopefully this is the right place to ask such a question. I recently purchased a Cisco Linksys router, as I was having problems with the main connection and my computer. The router works almost fine and acts as a bridge between the original router, and my computer.
I have a Westell Versalink plugged into the DSL phone cord. The Versalink is connected to my Cisco router, and the Cisco router is connected to my computer... All using cables.
Basically, it's Versalink -> Cisco -> Computer.
It works almost great, except I keep receiving huge lag spikes every 10 seconds, when trying to run something that requires a constant connection. (In my case, a game. It will lag every 10 seconds.)
I'm not sure I setup the Cisco router to properly work the way I want it to, thus the lag.
It used to be far worse, but I setup the PPoP login on the Cisco router independent of the fact that it's already connected on the Versalink.
I need some advice on how to eliminate this lag so I can get a steady and smooth connection.
Before anyone starts giving me Wireless advice, this has NOTHING to do with the Wireless portion, that works fine. (But probably would experience the same lag.)
This is happening regardless, and I need it fixed.
Yet again, I'll type out my layout here:
DSL / Phone -> Versalink -> Cisco Router -> Computer
I believe the problem exists in the Cisco router. I'm amazed that I was even able to get it to work how I did to begin with. However, I need some additional help.
Any help would be appreciated. Thank you!

Ice Sage,
I would do a little more research on the internet regarding ALL Cisco Linksys routers... the issue you are seeing is normal of thier routers right now.. and one they have not been willing to fix... The Linksys router you have ... in reality is actually the WRT160N with a few tweaks in the firmware... If you look at the specs, the E1000 is not the best router to play your video games with or HD Movies... you really wanted the E3000
BUT .... that also has that same issue as well but more pronounced... as well as over heating... if you take your router off you will see the lag goes away.
~ Joanie ~
Internet Connection: Wireless
Comcast Modem: RCA (By Thomson) Digital Broadband Model # DCM425
Linksys Wireless-N Router: Broadband Model # WRT160N V3 Firmware: 3.0.02 build 003
Method of Connection: Wireless / Intel WiFi Link 1000 BGN
Operating System / Service Pack: Microsoft Windows 7 Home Premium
Firewall: Kaspersky Internet Security 2011
Anti-Virus / Spyware Program: Kaspersky Internet Security 2011

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