The thief points are distributed after you press the Level Up button. You get the usual Level Up stat screen, and in the bottom right corner of it there's a thieving skills section where you have to spend those points by clicking the +/- buttons near the skills.

Or are you saying that the game freezes completely (as in, no mouse pointer / no reaction to it at all, or the level up screen not even appearing)?

I get the level up screen, but a sort of dimmed one. There is not a point spend choice. The only thing that works is the mouse pointer. Keyboard, like the escape key doesn't work. If I click on 'Accept', nothing happens. Can't shut it down other than using Task Manager, (three finger salute).

Keyboard not working in this case is normal, believe it or not; the game doesn't let you access any other screens/menus until you've completed the levelup process.

Now (assuming she is levelling up as a thief), see the attached pictures and let's figure out what's going on. This is Annah's thief class levelup screen; the "Accept" button is greyed out in the first one because the 20 thief points she got weren't spent, as suggested in the thread you're referring to. Once they're distributed between the skills via the green +/- buttons, the "Accept" button becomes available.

It would help to clarify what exactly you mean by "dimmed". If your screen looks any different than the first pic (apart from the changes done by the widescreen mod if you have it), then please post a screencap of it. It could be a completely unrelated glitch.

Oh, and for future reference: when asking questions about old RPGs, state right away if you have any mods installed, and if yes, list the specific ones. This can help, as some issues can be caused by mods, and some are exclusive to the "vanilla" game. Just a bit of advice.

Thank you YnK.
I feel such a fool. After looking at your attached screen shots, I finally worked out how to spend the points and make the 'Accept' button working.
The screen shots look exactly like mine. A little dimmed out.
Very sorry for the trouble.

No problem. And, I don't think your question is uncommon, actually. There's little incentive to have TNO switch to the thief class, so new players probably either remain a fighter, or - if they know enough about the game and its treatment of stats - train to be a mage ASAP. Annah is the only thief available, and joins relatively late into the game, so for somebody unfamiliar with this kind of RPGs suddenly having to deal with a completely new aspect of a character can be confusing.