Star Wars KOTOR 2 Glitching??

[akirainblack]

Hi,
I'm playing Star Wars KOTOR2 and since landing on Tatooine everything has been getting more and more glitchy!!
It has now culminated in when I move the camera left and right it is incredibly glitchy
If I then press w(I think it is) to move forward my character does nothing and then suddenly is half way across the field. He then starts spinning on the spot and the only way to reset the spinning state is to quit the game and then start it again.
I am sure it's not my machine as I have done a complete system format (Windows XP), fully updated it and put the game on a SATA drive.
My machine spec is:
Athlon XP 3200+
Corsair 1G Dual Channel LL
MSI K7N2G Delta ILSR
ATI Radeon 9800 XT (tried both official and Omega drivers)
Audigy 2 ZS Platinum Pro
(Sorry can't remember HDD makes)
Pioneer A08
with Daemon Tools 3.47

Thanks for any help.
Their only suggestions were to disable fast writes on the graphics card or force the GART to x4 or even lower.