Well, I see TON's of issues with your setup already.
#1. Your listing says "Processor: 2.6 GHz Dual Core processor" but go lower and the rating is "Intel(R) Core(TM)2 Duo CPU P7500 @ 2.26GHz 2.27 GHz" ...do you see the issue? And when I go to look for your CPU, it shows me it is rated @1.6Ghz.
http://www.cpubenchmark.net/cpu_lookup.php?cpu=Intel+Core2+Duo+P7500+@+1.60GHz
Note how it performs versus many of the other CPU's. It is definitely NOT a powerful machine at all.
#2 Your video card...ouch. Look below to see how it ranks versus todays hardware. Even a 9600GS last generation card is rated faster.
http://service.futuremark.com/hardw...ularChipsetIds=515&popularChipsetIds=529 The 5750 is a good card and runs Divinity 2 just fine...yet, look at yours and the rating.
#3 Nvidia High Def Audio? I assume from the video card? HDMI audio is never a good gaming solution.
And I will not even go over the many "edited" parts of your DXDiag (? Hard Drive: Hundreds of free GBs ? - lol)
I am sorry to say this, but YES it is your system specs.
Turn off as many features as you can (HDR, Shadows, AA) and hope for the best.