Have you got frame_delay 1 (or 2,3,4) in your mame.ini
I can never remember the full details, but in some variations frame_delay 0 can give you multiple frames of lag.
Leave autoframeskip and frameskip=0, which they should be by default, at least for latest versions of GM.
I second that you follow krick's advice, and do a clean install of GM. Or at least delete mame.ini and everything in your /ini and /cfg folders then run VMM again with the "export settings" box ticked.
I started with a new install folder for GM but I didn't start with a clean Windows 7 install. The Windows desktop turned black after I installed CRT EMU and it still says "test mode" in the bottom right corner. Is that something I need to change?
Make sure that you have set the new custom 640x480i 15khz mode for your desktop (or whatever works for you). You will need to re-boot after installing CRTEMU (this is covered in the documentation) or any new modes via VMM.
My PC runs an Intel I7 3930 overclocked to 4.2ghz but I have been having a lot of problems with it lately
Do really need to overclock an i7 4.2GHz to play MAME? Seems like overkill, everything should be at 100% already? Don't forget that overclocking can stress your PC components beyond spec & likely reduces their lifespan.
Just an idea, check that you have DirectX installed. You can check by going to start menu, select "run", type "dxdiag" at the prompt.
If problems persist, don't see your doctor. Post log files per Calamity's instructions.