Soldato
and i thought its just me, i got hbao turned off and everything maxed out. Occasionally i get a 1-2 second lag. It just stutters and then its fine. I'm used to it now. I got a 5870, it does seem to depend on server
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over 9000 fps in most areas.

i know your joking lol
I'm pretty certain on what's causing the slowdown.
I've been playing most of the day with FRAPS running and was getting insane framerate dips.
I killed FRAPS for the last 3 hours and have no slowdowns whatsoever.
Try it, I think this is the solution.
I'd heard that it was Punkbuster taking screenshots to check for cheating. Not sure how true that is, though.
Rich
Running 5850 at stock now, everything maxed out, HBAO off, AAx4, medium shadows (dunno if the last one makes a difference or not). As smooth as it gets, little to no tearing (76Hz refresh rate, Vsync off), over 9000 fps in most areas.
I get the server lag too.
I would be confident to say that a 5850 with your setup should be able to max out BFBC2?