Yeah, it's better to use C#, because the code gets actually compiled and it works faster. No more 1.5GHz needed for games with SNES like graphics. xD
EDIT:
Okay... I have worked on it and there is only one thing I can tell:
The faster you forget this and live on, the better for you. I actually WAS succesful in removing a part of the lag by testing it a lot and changing the way the images are being processed. However... another problem arises. Already at a map size of 120x60 it needs a few seconds to load the map ("Script is hanging" error could easily occur!) and 250 MB of RAM (it goes down on 180MB right after that). :'(
I think the right way of making a Mode 7 script would be to change the Bitmap class so images could be processed and slanted in a "perspective" way directly. This would be the only acceptable solution for this problem. I seriously doubt that any of the big game software developing companies used an algorythm like this to create Mode 7 in their games. I would rather say, they just used the bitmap slant I just mentioned.
Sorry, guys, but RMXP is too limited for this algorythm (and your RAM is too >.<).
I could have tried to decrease the lag more a little bit by splitting the horizontal strip images into many, but there is no point to this right now. Also I noticed the lag on a 120x60 map on "strip size" 32 is about as strong as the lag on a 40x40 map with a "strip size" of 8. So this is also not really a solution.
*sheds a manly tear* :'(