IT seems this is a steam wide issue caused by the idiotic decision to bring the XBOX HL2 enhancments to the PC version of ALL the source engine games. At first it just seemed it cut draw distances (ALOT, especially annoying in CS, when your tyring to awp someone and they just disapear all of a sudden)... but then when DOD came out, it became apparent that most people aren't able to play it, for it has caused HUGE slowdowns along with the cut draw distances.
Good news for me though, I can still play DODS on my 9600xt no problem.
BTW, if your using a nvidia card, try turning off HDR in the video options>Advanced, that may help a bit.
Edit2 - In some cases, DOD may appear to be running slow, even though your net_graph 3 will show a 60 FPS... this is caused by the other people in the server running at 12 FPS, thus creating a giant lag pocket. It also may be caused by a server not able to handle the game server itself, I ran into a few of those last night.