boba, i have the same problem as you, and my system is only a little better,
P4 2.8 ghz
512 ram
96mb intel grphics controler
i was half-convinced it was a hardware problem, but wanted to test out wether it was bug. so i went upstairs to my families computer (it runs kotor2 fine) and copied my brother saved game files (he was 15 hours into the game) i placed the files in my savedgame folder and loaded them, the game ran fine. So i figured i would just skip over the bug by starting a game on the other computer then transfering it onto this one, i tried it just a few minutes into the game, and 2 hours into the game, neither of them worked, so i dont know, it must be a bug that somehow only aplies when you're on the paragus or on the ebon hawk at the very start...