There's a massive thread about this... the disc versions seem to be unplayable on the 4GB Xbox Slims, although gamers with other Xboxes have had issues as well.
http://www.telltalegames.com/forums/...t=42138&page=8
And it has nothing to to with the speed that data can be read from the disc. The Xbox drives can read between 8 Mbps and 10 Mbps.
This is why super-compressed games like Mass Effect 3 can stream content rather effectively with no lag even though they're not installed to the local drive.
Maybe Telltale didn't do a good job optimizing the game for disc release, but the issue is with the coding and not with the hardware.