Chazz, two things. First, cpu affinity. I don't know if this is true, but people on the WoW forums say that by default, WoW runs only on cores 0 and 1 of a quad core. That would be consistent with the 50% cpu use you're seeing. So the first thing to try is setting the cpu affnity manually so your WoWs use different cores. You can do that from the Processes tab in Task Manager or with many of the boxing programs that people talk about here including my own.

Second, it sounds like your problem is not enough memory. When a PC runs out of RAM it begins to page. That means it begins shuffling info back and forth from RAM to the hard disk. When that happens, you notice a sudden sharp drop in performance and stuttering in games. RAM is cheap now, and you can't go wrong by going up to 4 gigs.