
I've been able to fully reproduce the hitching/stalling/1 FPS bug that some people have been experiencing, and even on NVIDIA hardware too. I've also determined what caused it (at least for my test case) and have fixed it.
Check your value of vt_uncompressedphysicalimages.
If you have grabbed a rageconfig file off the web, chances are that this might be set to 1. Now, Rage defaults it to 0, and by setting it to 1 the bugs come in force. So put it back to 0, issue a vt_restart and all should be good.
Doing a direct comparison of some areas that exhibit nasty compression artefaces, I'm not able to see any difference between before and after, so I'd suggest that the value of setting this to 1 is quite dubious.
It seems safe to leave vt_uncompressedvmtr at 1 and image_usecompression at 0, but if you still have problems flipping them back to their defaults (0 and 1, respectively) may not be a bad idea.