Hmmm, it's actually 'funny' how many people experiencing this exact issue, also has Core i7s.
Question for the i7 folk, do you all have HT disabled? I'm thinking with the recent changes to the game engine, it might try to take advantage of the hyper-threading but can't find it ... Perhaps I'm just talking out of my ass here.
I can however happily report, going back to Catalyst 10.4 has given me a nice boost. Apparently, the 10.6s are broken beyond words with tons of BSODs, 10.5a ( Hotfixed ) were a bit better, same stuttering but still a heap of BSODs when exiting and alt + tabbing but the 10.4s are fast, bug free and gave me an FPS boost, even Zargabad is playable now!