Howdy guys - gaming issues with COV (grahpical/cpu)

I'm running a :

CPU: 2.2g AMD Anthlon64 Clawhammer
RAM: 2gigs of 3200 Kingston
Video Card : Geforce 7800 GS OC
Western Digital HD 80g
Sound blaster Audigy 2
ASUS A8N-E Deluxe



I know these are slightly older but not that much, however I experience lag with all my settings on low or high around the huge city urban areas. The recommended settings are cranked all to high. I have played with these and I seem to get no affect. I usually hover around 18-45 fps depending on where I am at and what I am looking at, also images on the billboards are blurred out and take a while to load up(sometimes). I get in a instance and it runs smooth as a babies butt, but when I group with anything bigger then 6-8 people and there are numerous enemy's my computer will "skip" and "chug" while all the AoE effects are going on, even tho the frame rate stays solid for smoothness. I was wondering, is my CPU bottlenecking or what? I I am sliding a dual core into this old mobo in a few days , will that help it out? I can't buy a new rig at the moment but I am working towards it. But City of Villains I really didn't think was that demanding!? It feels like I have far the amount of specs for this game. But changing mutiple settings,drivers,overclocking,cold bug - slowing down my video card fan doesent seem to work. Any help?