Generally Unreal works great if you do a bit of tweaking first. The first thing you want to do is get the DirectX 10 renderer from here: http://kentie.net/article/d3d10drv/
The zip-file contains renderers for several different games. For Unreal you extract the unreal folder into the system directory of your unreal game folder on your hard drive.
Now run the game to check that everything works. Choose Direct3D 10 when asked to choose a renderer.
Exit the game afterwards and open unreal.ini in your favourite text editor. Find the [WinDrv.WindowsClient] section. Here you should set the following values:
FullscreenViewportX=1280
FullscreenViewportY=720
Now open the game. In the options menu select preferences.
In the video tab just have everything set to high.
In the control tab make sure you set up your controls in a way that makes sense to you. Unreal is a game from before WASD key setup was standard so as a a standard it is using the arrow keys which is only good if you don't have a mouse at hand...
