Pony, it still takes a good vid card to process all that information on the screen.

However, since the main processing is done by the CPU and RAM, chances are that it may be due to the system. I've never been able to work with dynamics decently on anything less than a dual CPU system. While your system is nice and fast, it still requires a bit more power to cycle all those calculations for the dynamics. Especially if you're doing water with ray tracing turned on.

Don't sweat it. Unless you're going to upgrade to a dual CPU system, there's not much you'll be able to do to speed it up.