5850 should give you up to 350MH/s, something is wrong in your setup.
About pool - use P2pool

you are most likely right, but i am honestly unsure of how to identify and fix the issue. i have a moderate understanding of computers, and i know my hardware. but i have no flying idea of how to configure it for max gain. i am mining with GUIminer.
Go for cgminer:
https://bitcointalk.org/index.php?topic=28402.0Download, unzip, run.
It will ask about pool settings, just remember to save settings and next time it will use them again.
For p2pool you need change 2 options:
- queue to 0 (default is 1)
- gpu threads to 1 (default is 2)
Do this after you save settings in config file - do it once and forget
