Give a little bit more info on your CPU... What I'm guessing is you have an Intel Pentium 4 2.66 GHz single core, which would explain the lag. It isn't fast enough to handle the game physics.
If not, what bus speed is your RAM set to? If you are using DDR2 or something like that, that would also explain the lag (333 MHz).
What you don't seem to understand is that a good GPU doesn't mean you have a good computer for running games. Your computer is only as good as the weakest link, meaning if your CPU is crap, your computer will be crap, no matter how good the rest of your computer is.
TheComet