Wow, thanks Trin!
That has to be one of, if not the MOST helpful reply I've gotten on a message board :D
After reading through your post I've decided that I should be able to get the KOTORs to work "fluidly" on my laptop. The big thing was, from the Bioware guys, they said that shared memory at all was bad and was unfixable, but with you it seems that there's surely a way around it.
I'm going to take all of your advice and see if I can get the games to run on my system, and as you can clearly tell, I am quite determined to get them to work!
I do, however, think it's best that I get KOTOR 1 to work on my laptop before I buy KOTOR 2 just to be sure of success.
And sorry to ask again, but did you mean that you use Catalyst 5.4 to run the KOTOR games, or does running 4.2 work better? I'm currently using the newest Catalyst and it runs absolutely awful with KOTOR.