Alright, so from multiple polls we know that 1.8 is lagging for a'lot players (I'm also lagging when playing Singleplayer) so I clicked Multiplayer and went on the Hypixel server (Mega Walls lobby) and noticed there was NO lag when walking around, everything was extremely smooth (when I used optifine on 1.7.2/1.7.10 it wasn't smooth) I ran around and it wasn't laggy, my FPS was 90+ (in 1.7 it was around 60 fps)
VBO turned on, Alternate blocks turned off, every other setting was left the same (1.7 settings) I didn't add any JVM tags.
So I went ahead and downloaded the 1.8 server.jar and just, walk around and little to see the difference to play on a server, it was laggy, but the "lag" is different from when I was playing in a single player world.
I wasn't lagging that much but, I had random freezes, this is probably due to the chunks having to unload -> load again really fast.
Server: (hosted on my own laptop, no added RAM)
It was lagging the entire time, but no freezes. I also decided to make the server "offline" mode to test will I be able to see my skin or not, in the end I couldn't see my skin but got the Alex 3 pixel wide model (see screenshot below)
Word on the grapevine is that the fps issue can be resolved by installing Java 8 (any version except update 20). However, Java 8 is incompatible with Forge for some reason, so you'll lose that option. I have no idea why that is. (edit: maybe it was just Forge that didn't like Java 8u20. I should probably figure that out.)
As far as what could be causing the stuttering, Java 8 is supposed to have a different and improved garbage collector. In Minecraft 1.8, all Vec3s and AABBs have had their instance pool removed and are now immutable types. It's possible that Java 7 is not respecting the immutable attribute and is causing Minecraft to hemorrhage orphaned records every GC.
Other folk are blaming the VBOs. I have no idea what that setting does that it wasn't doing before, so I can't really say whether this might be the case. Bunch a magic and hoopla is what it is.
Already installed Java 8 before 1.8 even came out, also forge seems to work with java 8 (for me at least) I'm also not sure about the severe chunk loading issue in 1.7, because everything works just fine for me.
The VBO setting did make it a little smoother for me.