Hey Dano, I have a similar system as yours (c2d @ 2.4ghz, 8800GT 512MB, 2GB RAM), and I can get it run at decent frames using the following settings:
The key is to keep video memory usage under 30%.
1440*900 (Native res)
In game AA at 2X
Vsync=OFF
All Post Processing=OFF
Textures=Medium
LandScape=Medium
Grass=Low
Tree=Low
Shadows & Reflection=OFF
Filter=Bilinear
In the Nvidia control Panel (Courtesy of Dart):
My FPS in Free Flight is over 60 FPS and with a bunch of planes around, around 30 FPS so still playable.