The #1 source of this problem is video drivers, and the LucasArts site (or here) isn't very helpful. The only solution that worked for me for this problem (and everybody else that I've read about) is to install older nVidia drivers when you want to play KotOR2. Yes, this sucks, but you *HAVE* to do it. I used 174.74 drivers, as I recall. This game just plain won't work with any newer drivers than that.