I have this exact same problem, but with the SB Audigy 2. I have move the "Hardware Accelleration" to 3/4 but still have the problem. This is with a spanking new install of WinME w/DX8.1b.
Asus CUV4X MBoard
Intel 1G P3
384MB Mem
Hercules Prophet III Geforce3 64MB
SB Audigy 2
Saitek X45 Combo w/Dhauzimmer v2.105 and HazardScript v0.8
Sometime the fps can drop to 3-4 especially when I squeeze the trigger to fire guns. (Before the Audigy2, I rarely dropped below 45fps and then only under clouds or near smoke.)
Terror