White 07,
Clay is one of the hardest things to grow grass on b/c the roots have a hard time penetrating the soil. Would it be possible to add some topsoil to your lawn? I would imagine if you laid sod, it would be too late.
I would also adjust your watterig schedule to 1" once per week for instead of many short waterings. By watering 1" once per week, you'll "train" the root to go deeper into the ground to look for water, bettering your chances of a lush lawn, especially in a the seummer. If you water many times a week on short intervals you'll "train" the roots to stay towards the surface.
What kinds of lawn food do you use? I dont want to get into a synthetic/organic argument but we switched to organics a few years ago and saw a nig increase health, worms in the soil and a better tolerance to drought. The worms are really good for the soil by making the soil higher quality when the excrete their waste. As you tend to make the soil better, the grass will grow thicker and healther, becoming its own weed control. When you have a thick lawn, the weeds have a difficult time growing since the grass begins to choke them out. When you mow set the mower to 2.5" - 3" and mow when you need to, not on a schedule. You never want to remove more than a 1/3 of the blade at any given time. This can cause the grass plants to spend their any on repairs instead of growth.
I learned quite a bit at
http://www.lawnsite.com and
Lawn Care Forum - GardenWeb. They offer great advice on all topics from grass type to mowers to mowing patterns (this is very important to reduce soil compaction) to anything else related to lawn care.
I babbled enough...
Jeff