Running slow

The game starts fine, but when I hover over one of those circle icons, it expands quite slowly before dissolving into the red and green trails. The second time is even slower, and by the third time, the game is virtually unplayable. The mouse moves slow as well. I have Vista SP2 and I just updated my drivers. Dxdiag did not show any problems. I tried running in XP compatibility mode but to no avail. What else can I do?

This is probably related to the capability of your video card. The more icons it draws, the slower it will be, because some older cards just cannot handle that many different images being swapped in and out in a single frame.
What video card do you have?

It’s an NVIDIA GeForce 7000M on an Acer Aspire 7520 that’s not even a year old.

I should add that when I played Oval Office on this computer, everything was fine.

However, that was before I installed SP2.

That sounds like the PS2 install changed the drivers for your video card somehow. This is a laptop video card yes?
Oval office and democracy 2 use the same engine, they should run the same. you can try the demo of OO to ensure this is the case. I recommend looking for improved or fixed drivers for the video card in this case.