Well yeah, the whole point of part 1 is the battle hasn't actually started yet. In the original version when I took the clips straight from Fraps and put them in I shortened the clips to take out the green selection boxes, but because I had to put together the whole thing again after converting the files I really couldn't be arsed to shorten them. I'll probably fix it later and release that version on Youtube.
The only reason it lagged was because I was controlling a squad upgraded to 30 soldiers which you can do in the cinematic mod, when we film later I'll just use normal sized squads so it doesn't lag.