With the help of this thread I was finally able to make my copy of Divinity II playable! So first of all I wanted to thank the OP for the advice. I also wanted to share what I did.

My system specs are as follows:
DFI INFINITY NF4 939
AMD Athlon 64 X2 4200+ @ 2.6GHz
4GB OCZ Platnium DDR400
eVGA 8800GT
Running Win XP x64

Not the latest or greatest system by far, but it does the job for most games. The problem with Divinity II was the micro stuttering I was experiencing. I screwed around with the in game setting and I was able to boost the FPS, but I could never get rid of the micro stuttering no matter what I did. I was to the point where I couldn't keep playing because it was just too jerky for my taste. Very distracting.

Upon finding this thread I tried the FPS limiter and while it did limit the FPS, the jerkiness remained. I tired various FPS caps along with various in game settings but nothing seemed to help the micro stuttering. Following advice about the "Frames to render ahead" setting, I tried setting that to "0" in the Nvidia control panel and it did the trick finally! (along with the FPS limiter) I also tested running the game with the Russian NoCD exe and that seemed to help give it a little extra "push". The NoCD exe also speeds up load times dramatically. SecuROM FTL.

To recap, here's what I did:

"Frames to render ahead" set to "0" in the Nvidia control panel.
FPS limiter set to 45 FPS
Russian NoCD exe

If anyone is interested in my in game settings i'll gladly post them here when I get home tonight.