Red Faction Guerilla MAJOR LAG?? (Cant Move)

I recently downloaded Red Faction: Guerrilla on Steam. It runs fine up until I get to the prologue mission (the one at the old Ultor comm facility with your brother, Daniel).

Once Im in that mission this is what happens:

1) During Daniels little conversation with Alec, my jacket flaps wildly and then the lower half disappears.

2) While he's talking, I can only look around. However once hes finished his little talk, I still can't move around.

Can anybody help me? wtf is going on