Server Time Lag, Can't Keep Up, Etc.

I'm looking for some honest advice on how to make my server run better. I'm running CentOS Linux with 8GB RAM and am using taskset to limit the processor to one core for the server (since it doesn't use multicores and jumping from proc to proc only causes lag). This is on a remote VPS. I'm also using a ramdisk for the worldfiles, in order to supposedly speed up the server (might go back to normal though since this doesn't seem to help). The processor is clocked at 3Ghz, quad core(which I know is meaningless).

I've heard of server running 200 players or more, and to me that seems insane when I can't even keep it stable at 20. I don't think it's a plugin problem because I get the time lag and can't keep up messages no matter what, even if I remove all the plugins. I'm basically asking for advice on how you guys keep your servers running smoothly.

I've been picking my way through forums but maybe I'm just not searching for the right thing. So, please tell me: What do you do to keep your server running smoothly? Do you have any special tricks? I'd really appreciate any advice, as this server should not be running this badly. I'm running 100% cpu constantly, and when we hit 15 players the time lag starts getting horrendous (even though it can also be seen lower than that, like at 8-10 players).

Here's my command line while using the ramdisk, which takes 3 megs of RAM for storage:
taskset -pc 3 java -server -Xincgc -Xmx4096M -jar craftbukkit.jar nogui

Without the ramdisk, it looked like this:
taskset -pc 3 java -server -Xincgc -Xmx7168M -jar craftbukkit.jar nogui

Please assist! Even links to threads which address this would help me. Thanks

Come on, I know some of you have solutions with your 200+ player servers. All of the searching I've done on the net has yielded only the results I described in the OP...I need advice.

EDIT by Moderator: merged posts, please use the edit button instead of double posting.

 

It's probably a trade secret D:

I wish I knew too

 

Yeah, it's pretty stupid that people would withhold useful information like that. Granted I'm not in a good mood right now, but it seems pretty selfish/greedy.