Grum has acknowledged this bug and stated they doubt they will bother fixing it for 1.5 and maybe be done in 1.6. I will not go into detail of the part where he thinks we should not use larger textures or get a better computer. I clearly think he has little knowledge on the situation. If someone can check out what Optfine fixed with it maybe we can add it into forge.
Thanks Kumasasa for the reply. I added the file for you though I don't think it will help much. Though I rewrote the bug report with new information I found while profiling the issue.
Pretty much it seems that if your menu is not open so your in the game playing, Minecraft is recreating textures for every single frame and or maybe tick. This has immense performance penalties when dealing with higher resolution textures.
This is the crash reported requested by the mod for 10 seconds holding down F3 + C.
This shows that TexImage2D must be rapidly recreating some of the textures over and over every single frame? CPU time is insane on it.
@Paul Aslin. Problem is not even custom textures. Just normal textures do this too just very little and less impact on good PC's. The people who suffer a lot are also people who use mods. The big issue here is modders add more and more texture the sheet grows and the impact is also greater.