My observations are similar to other posters: smaller window is better, even at fixed resolutions. In chrome, on a 3570k w/ a HD4000 iGPU running win 7 x64, the highest rez I can use without dipping below 60fps is 1024x576. 1280x720 is inconsistant, any higher is very, very bad.
Curiously, IE can only maintain 60fps up to 960x540. However, as you observed, motion quality is much more consistant, and it remains 'playable' all the way up to the maximum rez, even though the fps drops to around 30.
What version of C2 are you exporting with? Ashley has made some recent improvements to the C2 engine, including a better algo for timescaling (more accurate dt) as of r196.2. Might help...