Well I finally got EQ2 to run at acceptable levels and at a decent if not very good visual quality custom mode on my rig. I upgraded my BIOS, added a total of 2 gigs of ram and over clocked my CPU from 2.2ghz to 2.4ghz and it still stuttered.
Then I decided to upgrade from Windows 2000 to Windows XP Home edition w/ SP2 and now EQ2 runs good...if not great in a lot of areas. I don't understand what happened but for me my stutter issue is gone and I hope it does not ever come back. Now I am not saying this is a fix for anyone else but damn if it did not work out for me in a very good way.
P.S. I also did tweak my BIOS settings as described in the EQ2 tweaking article, along with a doing few other tweaks mentioned there. Of course this was before I upgraded to Windows XP though.