I suffer from the same issue - i7 quad-core CPU, 8GB RAM. The game seems to be capped at 50FPS. If I drop a smoke grenade, most of the time my FPS drops dramatically, sometimes as low as 6FPS. Unplayable.
The workaround: edit ufoai/base/ufos/ptl_misc.ufo, find "particle smokefield_smoke" and scroll about 17 lines down until you find "physics true", and change the "true" to "false".