Jerky Stop-and-Go Animation/Movement

I am trying to troubleshoot my Torque 3D 1.2 issue and am getting nowhere fast. I am running Windows 7 x64 with NVIDIA GeForce 8400 GS and 8500 GT display adapters for my two monitors. I am going through the FPS Tutorial and the movement is so jerky that I can't move the player to test different areas or the cameras to anywhere near where I want them. I press the 'W' for the player and it either doesn't move at all or moves 20 to 30 feet. I move a camera and there is a delay of up to one second before the scene jumps to the next view. Other apps such as Microsoft Word are also delayed and jumpy in their responses when Torque 3D is running with the tutorial game loaded. CPU usage is seldom above 12% and then in spikes only and less than half of the 4GB of memory is used. I have turned off all unnecessary services and closed gadgets and apps but nothing seems to help. Therefore, I have decided it must lie in the video drivers or associated video software. I have tried different settings under the 'OPTIONS' button when loading the game but nothing seemed to help. Any ideas?