Dropping framerate when recording games with Bandicam
You are hitting a bottleneck of some kind - from your description it is hard to see whether it is CPU or I/O based, but things that could well be culprits:


You are only running with 3GB of RAM - this is pretty low. The Java engine can require large amounts of RAM. I play a fair bit of Minecraft and 8GB really helped me out!
A Core 2 Duo is not exactly cutting edge - get a nice fast Quad Core i7 CPU if you want a gaming machine.


Until you upgrade, the following may help:


Your drives should be on separate controllers, otherwise they will have to share the bandwidth.
Reduce screen resolution and graphics depth/quality
Shut down all other applications (including background apps)