Theres several posts regarding these restrictive regs on the small compressors, changing the one thats on it, or adding a 1/2" filter/regulator extra direct on the tank is well worth it, they don't come with a water filter anyway which is something you need anyway.
A previous post with vids in to show you the difference when changing the regulator
http://www.mig-welding.co.uk/forum/showthread.php?t=12961
A previous post with vids in to show you the difference when changing the regulator
http://www.mig-welding.co.uk/forum/showthread.php?t=12961