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For my ATI card, it was not beneficial to load the very latest drivers. Before 1/30/2009, I saw performance improvements from using DirectX 8/9 but since then, use OpenGL has worked better. With only 1 GB of memory that you have you are probably seeing most of the same game-slow-down issues that I do: playing for more than 2 hours without rebooting gets slow.
If you can upgrade to 4 GB of memory, you will be very pleased with the improvement.
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