OMG, this actually works!!!
For weeks I've been trying to get my game to play without that darn CPU hiccup that sticks your CPU @ 100% for 3 seconds at a time and freezes the game temporarily. Had this occur in The Black Boar Tavern downstairs and also when you go upstairs to talk with Brave Sir Robin or David. Game also locks up on your way to the Bandit Camp when you leave Goblin Hamlet.
These lockups were only temporary, but the game still stuttered and it was unplayable.
Used FPS Limiter (read about it in the Divinity 2 thread over at GameSpot and here) just as directed, set the max frames to 30 and off I went. No more game freezes whatsoever.
I've also tried the following fixes/tweaks to no avail:
Installed AMD DCO (Dual Core Optimizer) works for XP based OS (win7 balances the cores equally by default)
Updated DirectX, Sound drivers, Nvidia Drivers, Windows XP, all C++ runtimes, etc. etc. etc.
Defragged Hard Drive
Tried setting CPU affinity level in task manager for divinity2.exe
Tried set priority level to high (which helped somewhat)
Tried Nvidia Control Panel settings like render frames ahead from 3 to 2 to 1
Also tried Nvidia control panel setting for thread optimization to always on
So it works now. If you do this fix, don't run the game from the auto-run on the DVD when you insert it. Close the screen and click the Divinity2.exe.limited.bat
file you created. Give it some time and all is ok.
There is still some jerkyness and stuttering, but no more CPU usage topping out at 100%.
I imagine I can increase the framerate to see what is best for my system and suggest you try the same.
***EDIT*** - I found what works for my system and have FPS limiter set to 53 FPS max.