Hmm.....go through Stardock/GPG's official technical support for help, because you never know; it could be something on your computer that is screwing the game up. In fact, that sounds like it could partly be the sound issues that some people get; I dunno what causes it, but a friend of mine used to get it on his rig. The game would run fine on high at 50fps, then drop down spasmodically to 10-20fps and start hap-slashing between 50 and 20, and turning down sound quality and messing with sound settings tended to help the problem. I fixed this by doing the /nosound fix in his shortcut, and voila! It worked without any lag on highest at 60fps. My computer doesn't have the problem, but it could very well be because I've got the latest drivers/ have an ATi graphics card. And also, my friend's computer is pretty much as good as mine is now (his can run GTAIV pretty well) and he upgraded his GPU, and no more problems. This could very well be directly related to graphics cards not handling sound and the processor being heavily taxed by that, and this 'sound' issue was also evident on another game that used the same engine; Supreme Commander.
Frankly, if this is the issue, there's no real way you can fix it properly unless you want to play without sound (which sucks bad). I, personally, have an ATi Radeon Gigabyte HD4870 with 1GB Vram, and I have no issues with the game whatsoever. I know this isn't the full issue, as you are getting visual glitches as well, but it could very well be part of the problem. Do you have any sound issues at all? If not then the rest of this post is useless
Heheheh. Make sure all your drivers are up to date and stuff; that white stuff is obviously a problem with your graphics card (or something unidentified). Then again, some games just don't like some computers, and that's unfortuneately the way it works. So I'm sorry for that, but the best thing for you to do is contact Stardock or Gas Powered Games' official support and hope they can help you with the problem.