I had some performance issues too with my system.
Intel Core i3-530 (4x 2.93 GHz)
GeForce GTS250 (using 2 monitors)
Spell animations were extremely slow. Compatibility mode for Win XP SP 3 and disabeling Visual themes and Desktop compositions helps me a lot. (Options translated from Dutch version so they might be called a little different)
Thank you very much! I've not experienced a single bug in this game except for the one that makes my game lag horribly when casting spells most of the time. Those with win 7 and nvidia should try this if they have horrible lag in the game. I never did have to run it in compability mode though.
I just simply right clicked my desktop, went to personalize - basic and high contrast themes and chose windows classic. Save your current theme before changing though unless you want to go through the tedious work of making your desktop pretty again :)