I have the Steam version, but it is unplayable.. runs smoothly except for certain points.. textures/models randomly vanish and game slows down to a crawl. Seems certain things cause it (weapons, torches.. hitting enemies with said weapons etc).
I've tried every suggestion for the cfg file, video settings, cpu affinity etc - doesn't help.
I use to play this game a lot and it was great, would love to live it again if possible.

While 1.19 did fix a handful of graphics issues it isn't any more stable, and a lot of problems remain. To my knowledge, nobody has reported experiencing anything like what you're seeing.
It would help to post your computer's specs, so if there are people here with similar rigs, they can weigh in on any problems they've encountered.
The most commonly experienced problems with 1.19 appear to be:
Major slowdowns when rendering text.
Am Shaegar runs like he's the Flash.
Saves take eons to load.
Plain old crash to desktop.
I get two (sometimes three, depending on the alignment of the planets.) of these and the game is still playable, though the experience isn't exactly ideal, of course.

Thanks for the reply.
Specs:
Windows 7 Build 7137 x64
Core2 Duo 6850 @ 3ghz
nVidia 9800GT
4gig ram
If I can be bothered installing another Windows that might make a big difference.. but I might just grab the GOG one in my next order.. so hate steam.

I am running the GOG version on Windows 7 64-bit without any problems whatsoever (except for the universal ones of long loading times and random crashes), although I am using the official RC (7100) and not a leaked version. The problems you are facing may be due to running a build not meant for public use, although it could also be a driver issue. You should be running the official 7 drivers if you aren't already (the ones on Nvidia's site, not the ones on Windows Update). You should also run the DirectX End-User Runtime Web Installer to ensure you have all the latest compatibility files.
If updating your drivers and DirectX doesn't affect things, you could try creating another partition--either physically or as a VHD image--and installing the RC on that (if it works you could then think about replacing your current OS with it; if not, you haven't lost your current OS just to test that one thing).
EDIT: oh, and did you do a clean install or an upgrade install to move to 7137? Upgrade installs can cause any number of problems. While upgrade installs usually work fine with released versions of Windows, for the pre-release builds you should always do a clean install each time.

Thanks for the reply, good to hear. I have done all those things already though.. nVidia/webinstall/cleaninstall etc - but my hopes are raised :)
A different version of Windows is always an option *looks at old WinXP CD*

Update: I bought the GOG version and all of those problems are gone, playing in 1680x1050 is fantastic too (even if the in game UI is tiny).
Only one issue which I can't work out. It's all fine, unless I look UP too much in most area's.. the graphics turn monochrome and it gets laggy as hell for about 5 seconds, it's odd yes, but ATM not game breaking.. anyone else had this issue?