Your SATA disks on striped RAID are what's making the big difference, I've capped stuff at 1024x768 with 2xAA and it's only the fact that the FRAPS file gets over 1gb so quickly that makes the machine unhappy....
For the record, the machine I'm using is a AMD 3400 64bit with 1024RAM and 1 200gb SATA disk....so since you have a better hdd config than me, you shouldn't have many problems running the graphics settings at pretty much whatever you want.
When it comes to editing, if you're using Premiere, then I find a little "fast blur" works wonders when it comes to smoothing the footage out a bit, although After Effects has a habit of undoing all the good work, since its render qaulity isn't up to that of Premiere.
Nice clip btw...next please...