How many processes do you have running? That's not very good performance.
I've got a 2.66 Ghz C2D CPU OC'd to 3.2 Ghz, 4 Gb DDR2 on 32 bit XP Pro (2.75 Gb available) and an 8800 GTS 512 and I'm pegged at 59 fps without fluxuation with everything turned up (including hi res pack) except shadows.
You should NEVER be falling below refresh rate.
Bald, I should also note that I run 4XAA with Win7 64 bit on an E7400 processor, and have Saitek SST software, Track IR, Turtle Beach software (for USB headphones) and Avast running in the background. I am currently running 40 processes, which for WIN7 is about par from what I've read. Yes, I could make some changes and trim things down even further and maybe overclock a bit and turn of the A/V but like I said.. I am pegged WELL OVER 90% of the time, and when my frame rates do drop, they still stay above 50 in the most extreme circumstances in the game with no stuttering. I also run custom soundpacks which may also be hurting performance (due to the USB sound) but I am quite happy with my performance, and don't feel a need to make any changes.
As far as IM programs, P2P software, etc... I don't even bother... that stuff is more of a pain than it's worth.
Lets see.. at your resolution, bald you have 1,764,000 pixels to draw. At my resolution it's 2,304,000 pixels. That's over 30.6% more. Yes I could say that is a significant difference.
Gyrene, you are correct. I forgot to mention the backwards+forwards compatibility of PCI-E. 1.0 can be used in a 2.0 slot. 2.0 can be used in a 1.0 slot, however obviously with decreased performance... but still worlds better lol.