I have an ATI 9600 Pro and I'm using 5.2 with pretty much no problems. There has been some graphics mess up (on Pegasus, whole textures disappeared by the ebon hawk at the end). Sometimes the game errors out when it's loading a new section. Not all the time, maybe once every 5 times. But it saves before it loads so I don't lose anything. I just make sure I quicksave often just in case. I'm not to Dantonine(sp?) yet (on my way there now) but I haven't had slowdowns in open spaces. Quite the opposite actually, I get my best frame rate in open spaces. using fraps, I was up in the 50's & 60's outside, why getting 30-40's inside, with the occasionaly 10-11 fps (which is probably a program I have running that is accessing the harddrive). I did recently turn the shadows off since they were ugly and not essiential to the game.
I run the game in 1024x768 85hz 32bit color (of course), I'm pretty sure all the textures are high, but no AA or any of that.
I also, in my graphics card driver part (control panel) I have Fastwrites OFF (most 9600 owners will get increase stability with this set to off)
and I have VPU recover set OFF . I also have my D3D and OpenGL setting to Performance, with application control for AA, FSAA, Truform, and V-Sync
and as I stated above 5.12 ATI drivers (not the Catylist Control Center, it's a waste, get the one with the normal control panel)
As for peoples BSOD and stuff, there can be a number or reasons why it happens to you. You can have other software running that doesn't play well with KOTOR2, you can have memory that just a little bad, motherboard drivers that aren't current. I guess that's why you need friends like me that can usually get things working. =)
and for the person who asked about installing drivers and uninstalling drivers, this is what I do:
I make sure I have the new or other display driver I want to install downloaded.
I delete c:\ATI directory and everything in it (including sub-directorys)
I go into Control Panel -> Add/Remove Programs
I remove the ATI Control Panel First.
When it ask if you want to Reboot, I click NO.
I then have it remove the Display Driver
This time when it asks if you want to reboot, I click yes.
While it's booting up, it will say its found New Hardware, and then usually the name of your Vid Card, if it asks if you want to install any drivers for it, click NO or CANCEL
or, like my system, it just automaticlly loads the ATI display driver that comes with XP Pro.
I then click on the display driver I want to install and follow it's directions.
When ATI installs it's drivers, it writes the install files to "c:\ATI\..." That is why i delete that directory before I install new drivers so when I reboot, it doesn't look there for drivers (it shouldn't, but it's not a big deal to delete it)
This works for any of the other drivers I have installed (like Omega's).
If you are having trouble getting drivers uninstalled or anything, boot windows up in safe mode (hold F8 when booting) and uninstall them from there.
have fun and good luck
