What's the bottleneck on my system?

Probably some graphical features not supported by your card. Try disabling all the video function in game and watch. If the game runs smootly, just enable them one by one till you find the features which creates the most slow down. then disable them.

Slow processor - strike one.
Not enough ram - strike two.
Sadly outdated video card - strike three.

They are all bottlenecks, but I would say that adding another gig of ram would help the most. It is nothing for my gigantic galaxies to consume well over 2GB of ram, especially later in the game.

I have 3GB of ram, a 2.8GHz Pentium D, and a Geforce 6800 GS video card.
And my system still slows down with a lot going on, just like yours but likely not nearly as bad.

When I have had a second monitor connected I was able to observe CPU usage while playing the game. It very often maxes out both CPU's. So that is probably your second worse bottleneck. The poor video card slows down the game in a general sense, and a more specific sense in the battle viewer. But slowdowns more noticable on larger maps with lots of traffic is probably more to do with memory swapping to and from the hard drive and the processor trying to keep up in moments of heavy calculations.

I wouldn't have guessed that all that activity was so heavy on the system. I always thought that if I can play a FPS on my system then I can always play a TBS from without any trouble. In short, I thought that since I can play DOOM 3 on my system I thought that this would be a piece of cake. Oh well, time's they are a changin'

well its playable, but the AI on galciv is 100x more advanced than anything doom has to offer, so it takes more cpu, especially because ai is working more than just one 'faction' and tracking a whole lot of units per group. in short, you can play it, but its hecka slow because the ai is so intelligent (and yeah, the RAM thing is bad on ginormous maps, lots of page-file usage on your system, hurts performance a lot)