I'm betting you need to delete the entire AGEIA Technologies registry key and reinstall Physx. Followed by running D2's PhysxReg thing.
This fixed the same error for someone else who was trying to play a different game.
Another user found it under HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node
Wow6432 has nothing to do with Ageia or the game and doing this will harm your computer.
DO NOT LISTEN TO THAT GUY.
