I am not sure about AH III, but the video memory usage information in AH II was incorrect in most cases, thus the ridiculously low value you had there.
Your main problem is your fundamentally weak & outdated graphics card (some more system RAM wouldn't hurt either)
What everyone should do is compare their current video card to the NVidia 9800GTX+, as that is the baseline performance card (minimum requirement) for Aces High III.
AHIII is very much depending on the GPU, my good old I3-2120 is still doing fine in combination with a modern 'budget' GTX 950. Graphics details adjusted I still get solid 60FPS (FPS more important to me than eye candy)