From memory GTA 4 was a badly optimized PC game, meaning that it would use more resources to run it than it should have done. It was heavily taxing on the CPU and GPU, and provided less graphics than it should have considering how much of the systems resources it used. You Also need to remember, that your equipment is sitting at the lower end and is only capable of playing the game - not playing it with high settings.
Your problem is likely to be that you have the settings turned up too high for the graphics card and CPU you have. Try turning everything down to its lowest quality setting and then report back if the game is still not running smoothly. A driver update of your graphics card and patching the game might help also.
In the main menu of the game there will be text that says options or settings, go into this and select something along the lines of graphics, video settings etc. Once in here, turn everything down (ie textures turn it from high down to low).