did this happen right after you upgraded? i just upgraded to 1.7.0 and booted with no problems. also what do you mean about input lag? like does it take a few seconds to register a keypress? i came across this thread because i googled to see what 1.7.0 had to fix or features it offerd so im kinda concerned now that i see people having this problem.
There is input lag if you use laptop keyboard but external keyboard don't have this lag problem so i have no idea