Graphical problems

After recently upgrading my system, I've noticed that I have massive graphical problems in GC2. Graphics, even the intro movie, are all choppy, jittery and seemingly highly accelerated. I'd take a screen shot but err, those don't show it since it's all about the animation. The most noticable effect is that any time I move my view, it will jitter back and forth then finally settle on where I wanted it. Edge scrolling is useless, since it scrolls to the edge of the galaxy instantly. In the shipyard screen, what used to be a slow rotation has become an out of control spin at impossible speeds. I have two theories as to what might be the cause, but unfortunately, till a friend brings me a service pack 2 disk, I can't try them out. Game is effectively unplayable till these issues are resolved.

My new system consists of:
Athlon64 X2 4800+ (dual core 2.4GHz)
Geforce 7900 GTX
Asus A8R32 MVP Deluxe
SB Live 5.1 (yeah, I know my sound card is out of date LOL)
2GB RAM (PC3200)
Drivers are fully up to date as of 1 week ago.

Theory #1: That it is a dual core issue that a lot of games have, that can only be fixed with SP2
Theory #2: That it is related to the same issue that I have been arguing with Microsoft about as to why MS Update won't work either. Probably will be solved by SP2 which I can't even download

Are there any compatibility issues already documented related to a system like this? Or should I just wait till I can get SP2?