I'm running an Opty 170 Oc'd 35% to 2.7 Ghz, 2 Gigs @DDR450, and an EVGA 8800GTS640 Oc'd. The game runs silky smooth @ 1280x1024, Though in some areas when long distance views of the strip (such as the map freemont street, when you walk outside into a firefight) pop up, the frame rate takes a dive. After reading about other games based on the same engine (Unreal 2 I believe) that run much better, I have come to the conclusion that this game just isn't optimised very well, and it hurts unless you have power to waste on it.
Interestingly enough, after reading many places how this game isn't supposed to utilize multiple cores, I ran Riva Tuner while playing several times to see if it was true. Though I have no background programs running besides Xfire, both of my cores are constantly pegged at 80-100% while running the game. So, maybe they've fixed that a bit?
I agree with everyone else here though, your 8600 is what is stopping you. Several of my friends can play it well on AMD X2 3800's with 7600GTs after we knocked down some of the graphical settings.
Put it at 1024x768. Turn Motion blur off, turn Vsync off, blur quality down, shadows down. HDR can also be very taxing, though it is nice to have on, you might see a big improvement if you leave that off as well. If the game runs very smoothly, try upping a setting or two just a bit, until it starts to slow down again.
You might also download the squizzy res patch to allow you to set custom resolutions (like 1152x864) that the game doesn't natively support, if 1024x768 is just too low for you.
Vegas is a painful game because it is so good that it teeters on the edge of phenomenal. As you play throught the game, and with friends, the areas where it is lacking are painfully obvious, and if only UBI had spent a little more time polishing things up, optimising, and filling out the online multiplayer options, they would have had an explosive fan base. As it is, most seem to be frustrated by what the game could have been, and isn't. I am included in that set, but that isn't going to stop me from playing it, as it is the best I've found in this genre right now.
Hoping Ground Branch by Blackfoot Studios is the next winner...Hoping they can pull off what Ubi seems unable to.