I have:
AMD X2 4600+
2 GB RAM
MSI (factory overclocked) 8600 GT
Vista.
All settings on (except for the global lighting one, because that makes teh lighting static), high everything, 1280x800 (or something like that). The game is running smooth (seems to be around 30 fps). I am having some trouble switching resolutions without first going to windowed mode, and I'd like it if they fixed the chopped widescreen, but otherwise the game is amazing. I'm in the upper wharf (and the cameras that are a bit to high in the air to hack piss me off a bit

).
So I don't know how the original poster is getting poor fps with a system that is better than mine, unless he has the res jacked up way too high.