ditch ATI and get a Nvidia card?
ditch wow and goto aion IMO!
have you disabled all your mods and maybe delete your WTF file? After the 3.2 patch most mods took a while to update. I run a PII X4 810 with a GTX260 core 216 and with all visuals maxed it's smooth as silk even in 25 mans. WoW is way more CPU dependant than GPU so you should be fine. It sounds to me like a WoW issue not hardware.
and this. Possibly even a full reinstall might help? I haven't played in about a year but I remember I had a lot of FPS issues too (Vsync, etc.) and reinstalling helped.