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I'm just using the latest desktop drivers from Nvidia. I have not used Setup 1.x. Also, I made a typo in my last post bf3 floats at around 60 fps on auto (ultra settings are playable too).

I can confirm that switching from Auto to Gen1 improves performance substantially. I was getting ~15 fps on all low setttings on BF3 on auto. After switching to Gen1 I got ~60 fps on auto settings. I have a T420 with an i5-2450M w/o NVS and 6 GB RAM. I'm using an MSI GTX 650 Ti (OC edition, I think that's what it's called) with a 350W Rosewill PSU (12V 15A I believe). I am also using the latest BIOS afaik. Let me know if you need help with your setup since I have my T420 working.