Actually, people often confuse lag with a computer slowdown. Lag has nothing to do with computer power but with your internet 'power'/ISP.
Ping is the time it takes for the computer to respond to the internet. Lag is high ping. Using the inverse theorem you can infer that lag = High ping.
Back on topic.
I almost have the same specs except I use an ATI

.
Guild wars supports ATI XD.
Check your drivers. Make sure they are up to date.
If you think it's a driver problem, roll the driver back using Window's Driver Roll Back. It's pretty useful.
ATI has a new Graphics card line up featuring the X1000 series. Get one of them and your computer 'next gen'
Good luck buddy.