Why the am I experincing lag to an unplayable level even on lowest settings?

I don't know why you are but I have a Quad Core 6600 and the same awesome graphics card but only have 4 gigs of DDR2 RAM, Windows 7 Ultimate and I get acceptable and smooth frame rates. My only issue is graphical anomallys with the textures when you swing the camera view around or inside the Algonquin- Alderney tunnel, that lasts for a couple of seconds.

This is one of my PCs, and it works fine.

I had heard that graphical problems could be found when using ATI cards, and when I installed my HD4870 X2 I had problems much in the same way that you are describing.

Although, many people are saying that GTA4 is simply a glitchy game. It works on some cards and not on others... You may simply be one of the many unfortunate customers...

I read that if you can use Riva Tuner there is a way to fix texture/graphic issues in the game but the steps can appear complicated if you're not familiar with the program which I am not. If anyone knows how to use this program and apply the "hot-fix" for this game pls. post here.