The problem is mostly noticeable in towns, but also happens outside.
When you are running it seems like there are missed frames and the movement is no longer smooth. My FPS is ok - in the range of 45-55 (all settings maxed), but when I look at the Frametime graph - it is very very bad (jagged line with big variations).

Specs:
CPU: Intel i7 4790k
GPU: Gigabyte GTX 970 G1 Gaming
RAM: 16GB
Windows 8.1

I am using driver version 347.88, because with 352.86 I had really big issues - crashing not only in the game but in google chrome too.

Any idea if this is Nvidia's problem ?, GPU's problem ?, problem of the game ?
Have anyone managed to find a workaround for this issue ?

turn background characters to high and see what that does. It worked for my GTX 780. It used to do it with the HairWorks but doesn't in the new driver.

If that doesn't work, use 3d settings in the control panel.

change pre rendered frames to 2 and see if that helps (if the earlier suggestion doesn't)

This issue has been reported before. It seems to be present on all versions of the game (consoles and PC). Apparently there is a fix coming in the next patch.

I've set the maximum pre-rendered frames to 2 and the "virtual reality pre-rendered frames" to 4 and now it is running much better !

You're talking about running afoot or with Roach ? Some think it's the horse animation which lacks a few "frames". I also see a strange stutter each time the horse ends its "trot loop". It doesn't occur while it's galloping.

I'm going to try your Nvidia Panel settings, Justin case. And remember to set "Fullscreen" in the Video settings. Windowed is buggy.

I have to play in fullscreen-mode because of this. In both windowed and pseudo-fullscreen-windowed I get this "micro-stuttering". No amount of tweaking the settings in the nvidia-panel helps.

Both.
With these settings I can see again some stutters from time to time, but is better than before.
The window modes make no difference for me.

if you don't care about 60fps on this game (plus my gtx 780 wont do it) but want all the goodness at ultra (apart from hair thingy) I found this guide and works well with my GTX 780 game looks stunning no jittering (i tested before and once I unlocked the 30fps cap I discovered the stuttering too)

try it i know people want 9845798347598fps every game but this game I can honestly say I am enjoying playing it 30fps with all the eye candy on

w w w.pcgamer.com/durantes-witcher-3-analysis-the-alchemy-of-smoothness/#page-1

It will not be for everyone but works for me

I Cant post links so remove spaces in the www

Locking the frames using Riva Tuner works even better !!
There is no need to set pre-rendered frames.
In game settings: set the frames to "unlimited" and in RivaTuner set them to your average frame target. My FPS is between 45-55, so I locked them to 45, maybe 50 would be good too.

Thanks for the advice, I'm going to try this asap.

You basically put every settings on "Default" (don't know the name of the settings in english) in the Nvidia panel ? I have power management set to "Performances", Threaded optimisation enabled, Max prerendered frames set to 1 and adaptive V-sync + triple frame-buffering.

Okay, so I've done a little self research and found something. If you set the game's fps limit to 30, there are zero issue with stuttering and input lag. The higher you set it the more those problems are apparent.

However, while using the Nvidia Control Panel; I set the vsync to 'adaptive' and have the game's on 60fp limit. This yields no lag input or frame spikes.

I am not at home now, but not everything is on Default. I've changed some of the settings for the antialiasing. My power mode is on "Adaptive", and I've tweaked the Texture filtering options.
These, however, should not afffect the frametime of the game. I've turned off the vsync option - I don't find it usefull for me and never had.