I had a bit of a dilemma that was distracting me from enjoying the game: I run a Radeon HD4870, and with VSync on I get consistent and noticeable microstutter while when off I get (predictably) lots of screen tearing. After a while of fiddling with the settings I found that changing filtering from Trilinear to Bilinear or Nearest seemed to get rid of most of the microlag for me at least. I still get a little stutter when I pull out my lantern, but from what I've read that seems to be a separate issue.
Just a heads up for anyone who might have the same issue, 4870 or not, and thanks to FG for an excellent game.