That's epic.
Old nVidia drives did't had any troubles with running H&H client, but game was laggy back then.
So, all-knowing mod at forum advised to update drivers to latests ones. Which have troubles with actually running H&H client at all.
Now game laggy AND running only 1 of 10 times.
Fortunatly, there is a way to repair H&H client on nVidia cards with latest drivers

Open up nVidia Control Panel. Go to "3D settings" (which are above PhysX settings). Find an option with "Thread Optimizations smthing" (Sorry, i have non-englush UI). Turn it off. H&H client will run everytime, not 1 of 10. Though, for some new games you would probably need to turn that option back on. G'luck!
I am mostly interested what on earth JAVA's Binding for the OpenGL (JOGL? LWJGL?), which have't updated since 25 Jule '10, have to do with nVidia drivers and game lagging

P.S. Though, my method only fixes client starting for newest nVidia drivers, it does nothing with "lagging". I'd suggest you tracert game's server and post here, it could help diagnosing your trouble.