Where most games are GPU-limited as long as your CPU is OK, GTA4 is the opposite - it's CPU-limited provided your GPU is OK.
I'm afraid you're looking at a complete upgrade to be able to run GTA4 reasonably. You will need to upgrade your GPU to at least a 9800GT or 4830, but then you will also need to upgrade to a quad core, preferably one running a decent clock speed. If your motherboard won't support a quad, then you're looking at upgrading your motherboard, CPU and GPU - just to play one game!
As well as personal experience on this game (Q6600 & 4870), I'm basing my statements on this test:
http://www.pcgameshardware.com/aid,669595/GTA-4-PC-CPU-benchmark-review-with-13-processors/Reviews/
Also, when I ran GTA4 with 4GB of RAM, it would use it all and there would be a delay when I quit when the PC re-loaded my desktop. Since changing to 8GB, this doesn't happen. This could mean your PC will struggle with 2GB even with a new CPU & GPU! This is turning into an expensive upgrade for one game.
Sorry to be the bearer of bad news, but I didn't want you buying a new expensive GPU and then wondering why the game still won't run with a playable FPS.