I have the following system, and I'm trying to diagnose the issue.
In Act IV or other Acts with lots of action, it seems I get momentary pausing/stuttering and a hit to FPS.
4GB DD2 RAM
EVGA GTX 560 SC 1 GB
On everything default 1920x1080, like I said, I get a hit in performance, but when I lowered Shadows and Physics, things improved.
Not really understanding the relation between GPU/CPU, I'm wondering if I were to upgrade my system to Intel i5, say, for this and other games, would things improve? I understand that Physics settings are linked to CPU, but are Shadows as well?
Yes performance would improve since an i5 has better and more cores. Shadows and effects like particles use the cpu to help the gpu shade I believe. This is a reason things that seem to be graphical effects like post processing can hurt performance even if you have a good gpu like yours. Does your motherboard support overclocking?, you could probably get another year out of it if you take advantage of the feature. If your going to upgrade your best option would be to go to a AMD phenom ii x6/fx 6100 or an Intel I5 2500k.
Based on your test, I think your best improvement would be a graphics upgrade.
But, To help clarify your options, run these two tests:
a) Run your games, but lower your resolution and eye candy.
If your FPS increases, it indicates that your cpu is strong enough to drive a better graphics configuration.
b) Limit your cpu, either by reducing the OC, or, in windows power management, limit the maximum cpu% to something like 50%.
Go to control panel/power options/change plan settings/change advanced power settings/processor power management/maximum processor state/
set to 50% and see how you do.
If your FPS drops significantly, it is an indicator that your cpu is the limiting factor, and a cpu upgrade is in order.
It is possible that both tests are positive, indicating that you have a well balanced system, and both cpu and gpu need to be upgraded to get better gaming FPS.
The 560 gtx is pushing an old dual core especially if it isn't overclocked. You'll need somewhere near the raw performance of a stock phenom ii x3 at minimum to not bottleneck that graphics card. This is a general estimate from my experience with the games I've played, every game is different so it isn't exact.
Making due with what you have, try going into the nvidia control panel under "manage 3d settings" and change the power management mode to performance. I think it defaults to optimized or something like that. I was getting major stuttering when a lot of things were happening on the screen until i changed this.