Same here, its a widespread issue like what was stated above, I actually posted an answer to this in a thread that got lost from the data corruption with 2 links to 2 huge threads pertaining this problem. For me, The closer I get to any Dynamic Lights, the more the game will stutter. It's like a Slide Show by the time I am right next to it.
Best way I've read that helps the problem a little is to Either Turn off Weapon View, or Turn off Dynamic Lights.
My average fps in UT2004 maxed out was around 350-450, max 650. I remember back when the 6800 was over 400 bucks back in the UT2K4 days, and maxing out the game required a godly computer, the good 2k4 days. I would honestly be surprised if Nvidia/Epic bothered fixing this issue, I'm surprised they have considered it, and even finished fixing it for Vista.
( Installed 2K4 to remember good times for 3 weeks after taking a break from UT3 )