Hi there,
Looking over your DxDiag it appears your system will need upgrading in order to run UE4.
It shows you have 2gb of RAM, Nvidia Gerforce 7600 GT with 1gb of video memory, and an Intel dual-core.6400 @ 2.13ghz.
Here are the recommendations for running UE4:
What are Unreal Engine 4’s system requirements?
For developing with UE4, we recommend a desktop PC with Windows 7 64-bit or a Mac with Mac OS X 10.9.2 or later, 8 GB RAM and a quad-core Intel or AMD processor, and a DX11 compatible video card. UE4 will run on desktops and laptops below these recommendations, but performance may be limited.
So unfortunately you will need to either purchase a new PC or upgrade your system. Sorry to be the bearer of bad news… 
Thanks