You know, one thing that has helped me (could be totally different with a different setup) is decompressing the .dds files. Some things, like wakes, deckwaves, smoke, etc. would look stuttery or would cause a loss in frame rate. So I have been going all over to those things opening the files, and saving them uncompressed. And, I have noticed an improvement in frame rates, and a lot smoother animation on things that I do this to. I am using a ATI Radeon 4600 series btw.
It may not help you, but it really couldn't hurt anything.
