The game worked perfectly fine until I reached chapter 1 where it would either freeze with a black screen(audio still there) or crash to the desktop. It seems to happen more often at the start of or during cut scenes.

I'm running Win7 32bit with 4gb ram and a HD6850 display card. Witcher on 1.2
Tried the 11.5b hotfix and older versions and they all crash.

Is this a known issue?

Fixed by installing Win7 64 bit. Guess this would have have fixed it as well http://usa.autodesk.com/adsk/servlet/ps/dl/item?siteID=123112&id=9583842&linkID=9240697

So the game doesn't work on 32bit OS basically.