I disagree actually, I think since 1.7+ the game has gotten a lot laggier for users, I've seen a tonne of reports of people saying that the game is running worse than it has done for them in the past.
Have you updated the server to the new version as well as Minecraft itself? Furthermore, are you sure everyone is running the same version of Minecraft?
Perhaps this has something to do with chunks being rendered as you move through the world? Or does the frame rate drop at random points when you are within the same area?
How long have you had Minecraft, have you just purchased it or is the issue new to the 1.7 update?
Have you tried backing up your world saves and installing Minecraft again from scratch, maybe something got corrupted or changed when you upgraded to 8.1 ?
With these massive error reports a lot of the time it can be fixed by just getting rid of your Minecraft folder (after backing up your world saves) and downloading a new version from Minecraft.net.
Also, try uninstalling the 32-bit version of Java so you only have the 64-bit left .
You should probably just try backing up all of your worlds and saves and delete Minecraft and start fresh by downloading a new version from Minecraft.net.
That's likely to solve the problem with your launcher, which I suspect is most of the reason it's not working.
Have you got 64-bit Java installed and updated to the latest version? As some other people above have mentioned it is possible that support for your version might have been dropped / not updated.
When you say Java has kicked you off, do you mean that you received an error message that said "Internal Exception java.net.socketexception Connection Reset"?
Yes! Some of the bad rep that Minecraft and Windows 8 got was because Notch refused to add Minecraft to the Windows 8 Store and directly support it as a Windows 8 App.
With that said, Minecraft runs just fine in the Desktop view of Windows 8.
