Basically any game from World of Warcraft to Bad Company 2 does the same thing... the games run smooth as butter but theres this hiccup like thing that happens at a constant 1-2 second interval. It's extremely annoying in FPS games as it looks like the screen skipped a frame or something whenever it "hiccups".
It has been doing this for awhile too... think my card is running hot or something? It never used to do this.
I tried upgrading the drivers yesterday but it didn't change anything.
My specs: (everything at stock speeds)
Radeon HD4850 512mb
AMD Phenom II X4 955BE
4GB (2 x 2GB) DDR3 Ram
Windows 7 Ultimate 64bit
your psu should be enough, i run mine on a low quality cheap 500w my self and i find no problem at all, your problem might be that you have fps at some locations that goes above your monitors refresh rate, because it will look smooth but you will see the tearing then or what your like to call "hiccups" and skips a frame, the monitor simply can't keep up with the frame rate,
my advice is that you try turning on "V Sync" it should work, it will basically limit your fps by the refresh rate your monitor is running on.