I finally followed Skuzzy's advice and enabled V-Sync on my video card, I had 3 options; off, on, or what I always use 'application controlled'.
When on Application controlled, I need to drop my frame rate to 45-60 to allow AH1 to work properly, otherwise my flight becomes stuttered.
So, like I said I turned V-Sync on last night, reset the frame set to unlimited and everything was fine except for my variance. I did everything I could to try and correct it, but as soon as I turned on 'Application controlled' again the variance leveled out. I did the reverse and the variance went wild once again.
Maybe I'm not too computer literate, but how can a video card setting affect connection? Btw, every other game including older and newer ones work fine on this computer, so I'm completely baffled.