I haven't played this game for a few months, and I've since went from a GTX 260 to 560ti 2GB. Sadly I hardly saw any performance increase from the GPU upgrade. I guess the AMD 965 just doesn't cut it for this game. But on medium settings the graphics still look decent.
You've got a quad-core 3.4 GHz cpu and a 2 GB gpu and you're on medium settings??? Something isn't right. My system is 6 years old and it runs medium to high.
Turn off all post processing except for rain drops. AF is a killer so try lowest setting. Turn AA down to maybe 2 at first then try 4 later. With these 3 things set low you
should be able to max most other graphics settings, and then try to move the fps killers AF and AA up gradually.
If you're still struggling once turning PP, AF, AA down, you must be bottlenecked elsewhere, OR (a long shot) when I first ran RoF for some reason it only ran on 1 core, so make sure affinity is set for running on all 4 cores.