Similar problem here. Game crashes when travelling from Valewood to Gilded Vale.
Playing on: Win XP Pro 32-bit Core2 Duo E8400 @ 3.00 GHz 4GB Ram Radeon HD3870 512MB PAE enabled /3GB switch doesn't help - the system can't even launch anything remotely graphics-heavy with it enabled. /USERVA doesn't help either. Here are the logs for anyone interested:
Error log:
Output Log: