Hello, Welcome to here
I wouldn't by any means say that is an inferior model. In fact, I wish I had 128MB rather than half of it. Although I must say, in comparison to the rest of your system specifications, maybe it is inferior to say a 3gHz processor and a gigabyte of quality
RAM.
There is the possibility of a heat issue. If you can, find out your system temperatures and let us know. If you need anything to report these stats, let us know.
Now it might not even be a hardware problem...do you have all the necessary drivers installed? If so, have you made appropriate tweaks to the software with regards to, say Direct3D for example?
See if
[this] page can be of any use.
[EDIT] You will need to work you own way through the support centre on the ATI site since it's HTTPS.
Hope this helps,
M_M