Hi
If you don't have a refresh rate lock enabled then the fps will be all over the map, xp has no default refresh rate minimum for games, and usualy tops out at 60. Your ati driver has a built in refresh lock in the monitor properties under video settings, but I'm not in front of an ati box right now to step you through it. You'll find it. If there are minimum refresh rate settings inside the game via a console command or other setting, use them.
As well, if you have all the details/etc set to hi ingame, you're punishing the vid card. I set the textures to max but turn everything else off. Turn the bumpmaps off. How much time do you spend looking at the sky? Or the grass and trees blowing in the wind? Good way to get wasted in game. The competetive player will always sacrifice the small details/fluff to get better performance every time. Unless your card is as fast with the fluff on as it is off. That'd be nice.
You can run in 16bit colour for higher fps, but some cards are almost as fast in 32bit, so anymore I always use 32bit. Most games will look fugly in 16bit unless they are written for 16bit. 32bit may also allow you a better game because fogging levels are much deeper, less of a cutoff/curtain/clipping plane than in 16bit.
A really high resolution is also detrimental to performance so beware of that. When I say hi res I mean higher than 1024x768. Think each step in res adds 1/3 more pixels to the workload of the card. I only run 10x7 for this reason on game pc's.
If there's a recommended driver from ati for cs, get it and use it. If you use opengl to play the game under, there are better opengl drivers out there than the latest ones, the latest drivers are optimised for d3d, and basicaly suck at opengl. Think the 3.5 ati drivers and thereabouts run great in opengl. If you play Tribes or Tribes2 (both are opengl games), you're way ahead with the 3.5 driver. D3d is ati territory, nvid _seems_ to be better at opengl. Wish this wasn't so. I still use a 9700 in opengl tho.
If you have anything else open or running in the background while playing, know this: games take 100% of your cpu and vid card. Turn off/disable anything not related to the game so you're computer isn't distracted.
Your system specs seem fine for cs, just needs some tuning.
Thus endeth the sermon.