Is my PC actually capable of running this game? (Low FPS. Freezing)

I'd say the performance of that GPU would be similar to the 8800 GT, which is the absolute minimum of this game. I would assule you could get at least a playable framerate on the lowest graphical settings.

Right now there appear to be some problems with Nvidia and DirectX. The issues may disappear when the new patch or Nvidia drivers are released.

Hm, okay. Any suggestions for reasonably priced ($150-$200) GPU upgrade for this machine?

The truth of the matter is that there is no really clear winner, although my best guess is that the mid-range Radeons are keeping their owners happiest.  Technically, your GPU slightly beats the 8800 GT minimum, maybe more than slightly. using the GPU Boss choice of benchmarks. 

So, I'd go with an R7 260 or 260X if you want to get in that Radeon midrange zone (the 260X being a better price for its performance level). 

At that price range, you can get the R9 270x. You may even be able to do a little better if a Black Friday deal comes up on some of the higher end cards.

I'm not sure at what point your performance would be bottlenecked, though. I had a Q6600 2 years ago and even with a Radeon HD 7870 it felt like it was holding performance back.

Thanks for the suggestions. Did you get a completely new rig or did you replace your Q6600? I've never replaced a processor, and I have been looking into it.

And would upgrading to dual chanell 2x4 gb ram make much of a difference?

buy a r9 270x its a around $200 think its equal to a 7870 a little better not the greatest card but it should be able to run medium settings this game is heavy on performance tessalation is the worst that and running ssao/hbao/hbao full kills fps msaa will eat your vram like no tomorrow dont even use it but medium to high settings aiming at a 60fps maybe ultra on one or two honostly the game looks good on medium or high i cant tell anything newly added from ultra if you want to save up some cash tho save around $350 and pick up a r9 290 think those are going for around 300 now 4gb buffer and spec wise a little better then gtx 780's playing at 1080p youll be fine for a few more years with that card again just ask around and check out reviews on these suggestions to see what you need and what you want and then look around some more and ask questions these are expensive cards for most people

You'd probably find yourself in a situation similar to mine if you try to replace the Q6600. I had to build everything from the ground up because the Q6600 uses an LGA775 socket and the more modern processors do not. My processor at the moment, the i5 3570K uses an LGA1155 socket. My motherboard could not support it, so I had to get a new one. 

You may want to do some research on your own. I'm not sure of any processor that could fit in an LGA775 socket that would also not bottleneck a high-end GPU.

RAM past a certain point actually does not really improve performance other than by a very narrow margin. All those 16GB/32GB RAM rigs I see people post often make me laugh. For gaming purposes, 8GB seems to provide the best performance per dollar, but you can do 4GB just as well. You'll be hard pressed to find a noticeable difference. There are better ways to squeeze out significant performance increases from your rig. An SSD, for instance.