alright dudes, here's the answer. Finally got this solved. I did a couple of things for my setup, I've got a geForce 7600 GS, which is fairly old, but still runs the game quite nicely. Not sure exactly what was the real answer, but I suspect:
1) goto here:
http://www.microsoft.com/downloads/d...2fcUiBFg%3d%3d
make sure you have the most up to date directx. Once I did this, suddently I can save games, get to the next level without crash to desktop, etc. However, I also did:
2) reinstalled the pre-beta nvidia driver, as I suspect the beta driver is for newer cards that are still being brought under control
3) modified the virtual memory settings, described in the game's readme.
Good luck to all.