That artifacting indicates your Video card is taking a gorilla dump!! Lower the resolution and bit rate (16 bit) and see if it runs ok. I think, my friend, you are in need of an upgrade! 7950gt 512mb PCIe card for $275!!! Yea baby!!!!!
Noli Nothis Permittere Te Terere!!
EVGA 680i, Dual EVGA 8800GT'S (650/950), 4 gigs OCZ DDR2 1066, Intel Q9450 at 3.8 Ghz, Koolance Water Cooled, Dual Plextor16x DL DVD+/-RW. Dual WD 250gb 16mb Cache Sata 3.0. 3DMark06 score = 19,168.