Saz,
I'm going to disagree with Memnoch here (I know, I know...the nerve!) and recommend that you do a full install. I had some issues with the recommended install until I did a full install. Also, since you mentioned that you have the 3D turned off, I won't mention that...but you might want to go through the configuration set-up again and make sure everything is set appropriately for your PC. If your settings are for a higher-end machine...you'll crap out.
Lastly, I'd check the web site of your video card manufacturer and see if they have an updated driver for DirectX 8.0. I'm running 8.0a and haven't had any problems, but you never know...
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Now where did I leave that doughnut?!