Grand theft auto IV lag

Gta IV has been lagging a bit on me... i dont know why , my computer seems to exceed the reqs easily.
Here are my computer specs. i suspect its my Graphics card , tell your own opinion.
Im running Windows XP service pack 3

INTEL E8400 CORE2D 3.0GHZ Processor
XIGMATEK HDT-S1283 "RED SCORPION" HEATPIPE CPU COOLER
ASUS P5QL SE IP43 ATX-Motherboard
KINGSTON 4GB DDR2 800Mhz RAM
500GB SATAII Hard disk
NVIDIA GeForce 9600 GT 512MB Graphics Card
20X DVD+-RW SATA NERO 7 DVD-Device

I have over 400GB free space.


I am running it on medium , as when i go to the quality settings it wont let me put it on high because of the memory thing.


I have some money stored in mah pockets that i can buy new stuff with.just tell me why im lagging and how to get the quality settings to MAX


So please , geeks help me up here?(dont be offended k?)



Also , i have found a perfect improvement for my craphics card...
GIGABYTE NVIDIA GEFORCE 9800GT 1GB Video Card
112 stream processors, 1GB GDDR3 memory (256-bit), 2xDVI And a Zalma cooler.