No, I never received an error message before the 1.49 patch. It ran perfectly fine (aside from 98/ME and the inventory bug, that is)...I was at 1.47 before the patch so perhaps that made the difference?
At any rate, WOOT! It appears that the inventory bug is not there in Windows NT Service pack 5 compatibility mode! Woohoo! So you can pass this on in the future to other Windows 7 users, though as I keep playing I will let you know if my observations are disproved.
As of right now, my character is wearing a sash, gloves, and citadel guard armor, all in the right place! Previously the citadel guard armor went onto the leggings, as my first indication of trouble.
When I get to the battlefield I'll equip up and post again. Shields are another good test, and cheap. Might be today, might not be.
Thanks for all the advice, in this and the other threads. I would never have known about all these compatibility modes without you, Raze =D
-Aaron