well, my .02 on the old xbox causing the problems is this, i own a V1.0 Xbox with a thompson drive mfg Date 2-28-2002 so that makes mine 1 month older than yours (mfg date wise) i bought the xbox a little over a year ago brand new so it hasnt been in use as long as perhaps yours has, but to get to the point i have beat KotOR 2 on light side 40+ hrs playing and the game locked up 2 times in differient places and other than that has played and worked prefectly so i do not think it is a matter of the xbox version or dvd drive
its probibly related to heat, or perhaps a bad savegame file
but this is true about patches there should be a way to patch any xbox game for bugs but if you have to pay for Live in order to do so then that is lame
couse im a long time PC gamer so i have thought many things about the xbox to be lame considering its just a cheap PC with some cheap hardware, and anyone who has lots of experience in building PC's knows that if you go cheap on hardware they tend to work good for no more than 2 years MAX if they even work perfectly from the get go