Same thing for me. I could run in directx7 and still have the game be playable. WSE2 has no directx7 support so the game is completely unplayable even with everything as low as possible.
Changing max framerate to lower did help a little. I changed it to 40 and in a duel server by myself I got a consistent 40, but with other people the game is unplayable. The odd thing is that my FPS doesn't seem as bad as it feels, the game is just all jumpy. I'm assuming it's jumpy because of the FPS changes, so that's why setting it lower it fixes it? I don't know, maybe I should go even lower.
Obviously my computer is just terrible, but it's lame that I won't be able to play when I could before.