40-50FPS is reasonable for the PC you have.
I'm not sure what you mean by "lagging" though. Stutter? Feels sluggish?
If you have VSYNC ON you may wish to turn it off. You'll get screen tearing but less lag (less sluggish).
Unless you want to spend money on better hardware, your other option is to LOWER the quality settings.
Tweak anti-aliasing, Shadows etc (or drop from a "HIGH" to "MEDIUM" preset).
64-bit Windows and RAM:
You'll have issues unless you have both 64-bit Windows and 4GB of System RAM. You probably do but just checking.