The snow effect on the ground is your graphics card, it possibly is overheating, or it my be a driver related issue, try a few different drivers. It might aslo be good to udate your drivers such as motherboard, graphics and direct x. I normally find lag is down to the anet servers, there is normally nothing you can do about that, but other tech minded people might say otherwise.
Your PC is few generations old, but it should still play GW at an acceptable level.
One final thing you could always defrag your hard drive and stop any programs from starting up, when you play guildwars.
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