What to do about these lag issues?

Alright, today me and the team launched our server Kiwike 2.0 and it's not looking too good.
We are running the server on Hetzner's X4 server currently (all we could afford atm.) and what is up with this! With just 2 players online, the lag is noticeable but you can play. Moving on to 10 players it's barely playable, the lag is about one minute and everything is just terrible.
Minecraft is using 90% CPU and 85% RAM. Is this even normal? What should we do now?

specs:
2x 400GB HDDs
4 GB DDRII RAM
AMD Athlon 64 X2 5600+

Help is really appreciated.

 

This would be helpful to begin with.
http://forums.bukkit.org/threads/you-need-help-we-need-this-information-to-help-you.2018/

 

That's weird :S

 

I had a 30sec to 20 minute login lag on my server, meaning everything froze ingame for that time when anyone tried to log on.

disabling iconomy and other plugins using SQL fixed it. :/

 

We disabled NoCheat and BigBrother, the lag has gotten much better since. Currently having about 20 players online with little to no lag. Some US players still have lag though, more or less.
@Orcworm Do your US players lag too?

 

I get crazies from western Canada who definitely have lag problems but it must still be playable for them since they haven't left months later. You could try getting them to ping the server IP if they're complaining.

I would try using LogBlock rather than BigBrother, with #617 my server was unplayable with only myself online.

 

Alright, thank you very much for your help!