I put it back to High and the stuttering problems return. I then put Texture Quality back to medium and for the fun of it put AA to x4 and AF to x8 (both were x2).
Result: smooth running, jumped to Neptune, whacked some Xenon and docked at the defense station.
Conclusion: The High Texture Setting is responsible for my stuttering and freezing issues with the game.
Why an HD4870 with 512MB of fast GDDR5 memory can't handle the high textures of X3TC but can handle Crysis Warhead on Enthusiast settings is beyond me. No doubt a patch or Catalyst drivers will solve this problem.
Anyway good luck to the rest of you suffering from problems, do try the medium texture setting if you haven't already.
Night night
