Well it is sometimes not the PC but the graphics engine and the pc, and the hardware where a different setup produces different results and sometimes unexpected occurences.
You say you have SP2, but usually as far as I know, this line usually says "Service Pack 2"
Operating System: Windows XP Professional (5.1, Build 2600) (2600.xpclient.010817-1148)
try typing in Start\ Run "winver" and see what it says in there.
For you display drivers, you version is
Driver Version: 6.14.0010.6606 (English)
with ATI it is not clear, but the latest is 6.5 but i know that does not equal the same, try this link
also the date
Driver Date/Size: 3/22/2006 04:56:42, 257536 bytes
which is March and the latest version is May.
they look like they are 2 years out of date
Date and Size: 8/2/2004 14:09:18, 635281 bytes
I think these will work,
try them all and see how the game runs.
Cheers, good luck