I guess I got a fucked up disc.
Maybe you did not follow the instructions properly. One disc is install, that means you got to install the game onto the hard drive, and the other as play meaning that the disc has to be in the disc tray to play, but do not install that disc or else it result in low FPS, some items/objects may not render, and load. If you've installed the game properly, and still having this issue. I suggest further diagnosing/testing.
Umm.. GTA is only 1 disc.