Slower fps after win7 upgrade

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I've never had a problem with my display card before I 'upgraded' to windows 7. My fps in IAH Dragonica is running at approximately 30-40. It was a smooth 60ish before.

There is also a considerable amount of lag in games like Outspark's Secret of the Solstice and NCsoft's Aion, which I normally played with little to no lag on windows xp.

I have read around and saw something about ATI dropping support for the 19xx cards in win7, but that was said in articles last year. I could not find anything recent about compatibility between the x19xx and win7.

I have installed a vista version of the ATI Catalyst, since it was encouraged.

I'm not a computer-hardware-configuration-tweaking-saavy person, so you might have to baby me through this.

Could someone help me with configuring my computer to accommodate the new OS?
I would very much prefer to keep the card and just configure it to the best settings possible. Maybe upgrade a few things like RAM if needed. I do not have a big budget, but am willing to spend a little if that is what it takes.

Thank you in advance.

Intel Pentium D 945 Dual Core, 3.40GHz
2GB RAM
Windows 7 Ultimate, 32bit
ATI Radeon x1950 series, 512MB
Latest version of ATI Catalyst for Vista
*If there is anything else you need to know in order to help me out, I'm more than happy to look it up and tell you.
 
Latest version of ATI Catalyst for Vista
When you say latest, do you mean 9.3? That was the last Catalyst version that supported your card.
 
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