Ashley
Obviously, you understand how the internals of C2 work better than us. But, maybe you could take a look at this example capx and see if you see a difference in performance between forced object recycling and normal create/destroy operations. Click to toggle between modes.
https://www.dropbox.com/s/s2v4h18r172v4 ... .capx?dl=0
P.S. 
GeometriX: I modded your capx for this.
I would almost say it is an issue of the browsers trying too hard to find and delete objects on their own. It gets so concerned with locating/destroying objects and cant keep up with the game itself. (Non-recycled has 2000 objects vs 5000 recycled)
Like I said earlier, the way the game works, only 1 thing really works at a time. So if the browser is focusing on figuring out what it should remove, vs us telling what to remove or even re-use it is going to slow things down.
I also don't think that has much to do with the Jittery movement. Garbage collection might help performance for objects off screen, but rarely should be a real issue.
If you need 2000+ objects all being animated off screen....you might be doing something wrong. Dynamic content creation would greatly limit how many objects you need.
I am fairly certain the issue comes with refresh rates/v-sync as Ashley was saying.
Locking movement at or below refresh rate removes all jittery movement.
This is for both aero and non aero browsing.
when I set my system to 144hz (144fps) the jittery movement can hardly be seen.
60hz and 60 fps, again looks smooth.
If I try to go above the refresh with movement, jittering is seen, more so at lower refresh than higher. Thats why I was making a big deal about the frames needing proper interpolation, tv's often do this. And in animation, getting smooth animations greatly comes from proper interpolation.
I'm willing to bet, a project that has invisible sprites as the actual game and "real" positions with visible sprites interpolating to those invisible sprites will get that "smooth" effect people here want.
I have to really really stress though, a square is much easier to see a jitter to movement than a fully animated player in an actual game environment.
in "real world" uses, this "issue" is not so much an issue as people are making it out to be.
Some1 feel free to yell at me if none of that makes any sense. I'm really tired today haha. And admittedly my brain is like bleghhh and spit forth thoughts. Enjoy <img src="{SMILIES_PATH}/icon_razz.gif" alt=":P" title="Razz">