Strange. Might just be how it's emulated. Are you overclocking safely?
Edit: try turning AA down to 6x
Double Edit: Tick "LLE on Thread"
Your profile says you're using a really damn old build of Dolphin that's known to have major issues. Use a current development build from here:
http://dolphin-emu.org/download/
And aside from that, you're using a bunch of unusual settings.
-Use the normal JIT, nobody's touched the JITIL code in forever.
-Use DSP HLE, it should be flawless for Melee. And if you're gonna use LLE for other games, use LLE Recompiler, not LLE Interpreter – the Interpreter does the exact same thing, but slower. (Don't check "DSP on Dedicated Thread" or "LLE on Thread" unless you're running into speed issues, as it occasionally breaks things.)
-Manually setting the framelimit is kinda pointless, just leave it on Auto.
But he is having speed issues... DSP LLE on Thread should help performance from what he has. But using HLE seems like a better choice, but with his CPU he shouldn't have that problem...
Anyway, I hate when people ask questions and then leave forever and never come back to see the answer. Oh well

DSP on Thread actually gives me a slowdown on this CPU. Odd, considering it's a dual-core with hyperthreading. Might just be the compiler flags I used. :\
It gives me a slowdown as well, but i7 3770k is quad core, correct? So isn't that inpossible to slow it down when it's on a whole other core, rather than the same one? If your CPU is dual core it shouldnt help. I might be wrong but I'm pretty sure I'm correct.

Yeah, I know, I know. Still, if he's using HLE or not running into speed issues, he doesn't need it, does he?
Well if Melee has no problem with HLE sound, then yeah. Not sure though, thought I noticed some glitches with sound when I played it. I'll check the wiki.
You're using official 3.5 and not a current build with new-ax-hle, butthead. v_v
But the latest builds are so much more demanding. AX-HLE is like almost as demanding as LLE. I like 3.5 and 3.0 because they are fast. And this guy is having frame drops which he dislikes so
much that he decided to create an account on Dolphin Forums along with a whole new thread about it. Then he left :.(
So we're both right in different ways. And with his CPU I still don't get why he's having frame drops in the first place. Must be like the JITIL thing. Why would he use that?