Re: Wow, this game is a system hog.
Smooth here too (literally 59/60 fps when running around not fighting, going to high 30's low 40's when I have about 7 dead bodies on the floor in one tight spot and more enemies I'm fighting. Most firefights are mid to high 40's and heavy special effetcs (like shields and elexis' hologram) sitting in the 40's too.
Playing in 1280x960 @ 85hz on a P4c 2.8GHz, 1GB 3200DDR, and my 9700 pro. Game looks better than HL2 imo, thanks to it's architecual style and overall visual flare style. Runs just like HL2 does. And no I don't use AA or AF (AF makes fences in steam look...weird, AA is useless at 1280 res for me...not worth the performance hit).
Actually I tried it first at 1024x768 and had stuttering issues at some moments, but then I remembered that I had used some flipping for Oblivion, disabled that as it should be (undefined it) -- Oblivion worked better with it on 1. Anyway, did you maybe tweak your system for one particular game (esp Oblivion)? If so untweak it and see how it runs.