You should be getting 60fps - 90fps depending on if you have Vsync or Frame Smoothing enabled.
Also ran into this problem once and saw others also having it. Mine is fixed now but I'm not sure of what the exact cause was. Wanna figure this one out so I know what to do if it happens again. Could be steam, UT3, or the Graphics drivers. What graphics ddrivers you using btw?
Lets try something:
1. Upload your UTEngine.ini file and pm me the link
(located here: My Games\Unreal Tournament 3\UTGame\Config)
You can use www.sendspace.com (no registering etc required)
2. After that delete your entire config folder (My Games\Unreal Tournament 3\UTGame\Config). Just keep your serial handy, because your gonna have to re-enter it.
3. Run the game as you normally would. Change the resolution to 1280x1080. Take off Vsync and framerate smoothing.
4. Try hosting a normal LAN game on dm-Rising Sun. Put in about 5 bots.
5. Type in stat fps in the console (F10) and see if your framerates drop below 90 during the match.
6. Tell me if your game is still giving performance issues. If it works please also upload that UTEngine.ini file so that I can compare them.
If not I'm going to compare some settings of your UTEngine.ini to mine.
I also have a 8800GT so I should be able to spot the problem quite easily.
I'm exspecially interested in these: