I'm officially at a loss. I'll say it outright I'm not a computer person so if I'm missing some blatantly obvious fix please take pity.
I have all the required specs (obviously), I've done all the generic help suggested (updating drivers, ex.) and I've turned all the games performance specs down as low as they can go. More over I know this game can't be to much for the PC as I've run faaaar more system intensive games on it.
Yet it still runs like the slideshow from hell. Seriously its beyond unplayable, like 1-2 FPS.
Please if there are any ideas you can give me outside of the norm to optimize performance I would love to hear it. I also apologize if this is a question thats been asked before, I searched and didn't find anything that fit my situation specifically.

It's a good idea to specify which game you're having problems with, along with your Operating system :)
There are known problems with Beyond divinity and Vista/windows 7 - this page has some suggestions :
http://www.larian.com/forums/ubbthreads.php?ubb=showflat&Number=408193
The change to limit available memory seems to be particularly helpful.

Terribly sorry, didn't realize this forum was devoted to a series and not just the one game.
It's "Divine Divinity"
On Windows Vista 32 bit
I'll try that site.
Edit: Even though those suggestions were for Beyond Divinity I tried them anyway just for throughness sake and none of it worked.

In the game shortcut, on the Compatibility tab, do you have the "Run this program in compatibility for " checked? If so, uncheck it and make sure you have the "Run as an administrator" checked on the same tab.
Is your system a single core, dual core, dual core quad? Is it Intel or AMD?

AMD, single.

Before trying any of the suggestions below - in the game shortcut, on the Compatibility tab, set the "Run this program in compatibility for " Windows 98 / Windows ME with "Run this program as an administrator" checked - No improvement, uncheck the compatibility mode but leave the run as an admin checked.
I assume, when you installed the game, you right clicked the setup.exe and clicked "Run as an administrator" from the resulting dialog. If you just double clicked the setup.exe than you might try reinstalling as an administrator as described above. Vista / Win 7 tend to block some disk writes if the install is not done as an admin which can affect the install.
My first thought is to update the video drivers, which you have done. The driver download should also be installed by right clicking the setup.exe and clicking "Run as an Administrator". If you just double clicked your driver update, it may not have fully installed.
If you did install both game and video driver as an admin, disregard the above . . .=)
If your account on the computer is a standard user account and not an admin account (sometimes either actually), you might try creating a directory outside of Program Files, something like C:\Games and install the game there. UAC can cause problems with a game installed in the Program Files directory. If you reinstall outside of the Program Files directory, make sure you uninstall the game first and delete any DD directories that remains in C:\Program Files\GOG.com\Divine Divinity, including the DD directory. After right clicking the setup.exe and clicking Run as an administrator, when the GOG installer opens, click the Options button on the lower left corner and point the install to the C:\Games directory.
You might also Alt-Tab out of the game and see if your firewall has any "Confirm this action" dialogs up in the background. Once confirmed the firewall will allow the action without further input. If not confirmed, it could affect game play. You will not see the dialogs while in the game screen.
You did not mention the video card you are running or the amount of on board memory. Some cards utilize disk memory to some degree, integrated cards more often. Check the amount of free disk space you have available. If you have very little disk space and the card is using disk memory it could slow down your graphic performance considerably.
Also have you tried turning your Anti-virus and Firewall off temporarily and starting the game, disconnect from the internet before doing that. If DD runs, turn one back on then the other until you can determine which is causing the problem.
Edit: You should open a help ticket with GOG support since they may have a ready solution . . .=)