Serious gaming performance problem

What was the configuration of your previous computer?
What are the differences between the two?
Do you have the capabibility to check your systems thermal levels?
Excessive heat can cause these types of problems.
However I would like to know what has changed from one system to the other. There are other possibilities that could cause your problem.

The problem is probably in the resolution you have changed. some games require 256 colors to run some require 16 bit colors, so it takes time to jump the resolution of computer to the requirement of the game. This change in resolution is done by the game.
You should do is .
right click on desktop-> properties, then settings and select the 32 bit colors and 600X800 resolution. If even then problem, then Gradually change the settings I told you above and then test it. Also set the referesh rate of the monitor to 72 frams/sec.

Do you have a network card?  If no, forget this comment.

If yes, is it connected to a network?

If it's not, try DISABLING the card.  A misbehaving DHCP client can certainly cause this behavior.

You might try purchasing more RAM and shutting down unnecessary programs helps immensly.  Also, if you are using and P2P file sharing programs such as KazAa or Napster, you might want to disable file sharing as this will put more files on your computer that you are unaware about and cause your system to slow down.  You can also free up some memory by uninstalling some unnecessary windows components in the Control Panel.  Hope this helps.  I've had similar problems, so take it from me, you have a good setup and the ATI card is the best money can buy (Almost!)

You might try purchasing more RAM and shutting down unnecessary programs helps immensly.  Also, if you are using and P2P file sharing programs such as KazAa or Napster, you might want to disable file sharing as this will put more files on your computer that you are unaware about and cause your system to slow down.  You can also free up some memory by uninstalling some unnecessary windows components in the Control Panel.  Hope this helps.  I've had similar problems, so take it from me, you have a good setup and the ATI card is the best money can buy (Almost!)

I shut down all unnecessary programs when I game using a program called EndItAll.  It will even get the stuff running in the background and frees up a ton of system resources. It's freeware and you can find it by running a search on www.google.com.  I highly recommend it and it's handy to have even if it doesn't fix your specific problem.  By the way, you mentioned the type of memory you have, but not how much.  Running XP, I would recommend at the very least having 256megs.  If you game a lot, you definitely need more.

I had this recommended on other message boards and it just happened to be ATI's first, last and only recommendation.  

(I sent them a copy of the question!)

Wesley B gets the points here.  All of his tips are good for video card and gaming performance issues.  I would have never thought of turning down hardware acceleration even though throughout this problem I must have looked at that setting at least a 100 times.

I just switched sides from Nvidia and Intel dumping my p4 1.8 and my Albatron ti4200 on my girlfriend for my current setup.  Even with this glitch I'm happy about my choice.  Just by turning it down one notch all my games are running perfect so I hope that anyone who has a similar problem can find this message thread.  ATI, stuttering, pauses, latency, gaming keywords.  Another thing that I found that sped things up quite a bit and made the flow of Rallisport Challenge(Microsoft's awesome new rally game) noticably smoother was lowering the AGP Aperature size to 32megs in your BIOS.  

Also I should comment on my ram because I got some responses to add more ram ("poof!").  I just have one stick of corsair xms3500 512meg (pc3500/ddr433). But, I've only run it at 400mhz cl2 and at 333mhz cl2.  Anyone running a via KT400 motherboard and not overclocking make sure to set your ram at 333mhz in your bios.  Sisoftware memorybandwidth at 400mhz was 1452/1397.  At 333mhz, it came in at 2110/2066.  That is a huge difference and with that much of a spread in bandwidth performance I could see that affecting any gamer with any game.  Anyone with a similar setup shouldn't really worry about more memory but what you set it at.

Anyway I've decided to dump the motherboard and memory off on my girlfriend and I'm waiting for my Asus A7N8X and 1024 Dual channel OCZ pc3200 ell 2x512. The benchmarks on these nforce 2 boards are just too amazing to pass up and apparently the nforce 2's will support the new amd barton 400mhz fsb (MAY!), when we can start running cpu and memory async.  

Thanks and have fun gaming ;-)

I created a support call to solve this btw.  Having to lower the acceleration might be a solution but it shouldn't be necessary.  I'll post an update if new drivers or something help.