Try this trainer, posted recently by Phrozen at the GTA3 Forums (I don't know if he was the one that made it, he just brought it to our attention) at this post. Or if that link doesn't work, download the trainer directly at the Downloads section . 

"This trainer lets a person control the view distance in game
Via hot keys. It how ever goes further out then the games
draw distance control and also draws closer too.
for Low end users this means much better frame rate and
for high end users less pop up of the scenery.

Help is included in the ZIP file.
Winzip opens zip files if you dont have XP."

UPDATED: Try sheepy's "High FPS Fix v3" at www.sheepyuk.com. Apparently this converts the textures in the game to 16 colors, and gets rid of rain, rain splashes, litter, newspapers, and other unnecessary elements. Read more about it at www.sheepyuk.com .