You should be able to do a full install with that edition, which will eliminate the need for disc swapping entirely. (If you then add a no-cd crack, you wont need CDs at all, which means you can keep them somewhere safe). Full install in the BG1 sense means doing a custom install and clicking every single option. The 'maximum' installation option skips the movies.
Have you tried starting a new game without the patch and going to nashkel? I wouldn't think the patch would cause problems through a savegame but weird things can happen with the infinity engine.
On the backstabbing, go into stealth mode, get behind your target, and perform a melee attack with a weapon a theif can normaly use. (So a fighter/thief with a 2H sword is out of luck). You should see a message indication a successful backstab.
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