Key points
General information
-windowed
<path-to-game>\GameData\Save\Profile_<user-id>\User.ini
[Engine.PlayerInput]
MouseSmoothingMode
0
MouseSmoothingStrength
0.0
1.0
MouseAccelThreshold
100
User (joystick).ini
<path-to-game>\GameData\System\System.ini
UseJoystick=False
UseJoystick=True
Dinput.dll
Dinput8.dll
XInput1_3.dll
XInputPlus.ini
XInput Plus Files
<path-to-game>\GameData\System
JoyR=Axis aBaseX
Speed
Speed=-690
JoyU=Axis aLookUp
UseDefaultDriver=False
<path-to-game>\System\System.ini
This is a common problem, especially on ATI/AMD cards. Setting Bump mapping to Low should solve the problem. You can also start the game with a DirectX-8-to-9 emulator or install a fan made graphics fix to resolve the crashes.
If you get an error message saying, "Failed to detect Steam", "Problem starting up Steam", or something similar, try restarting Steam. If that does not work, try deleting ClientRegistry.blob in the \Steam folder.
If it continues to not function correctly - it may work the first time after running Steam, then fail - then do the following:
<path-to-game>\GameData\System\
This will correct the HUD for 16:9 resolutions.
<path-to-game>\GameData\Textures\
HUDTextures.utx
In Vista and Win7 (possibly later OS's as well) if the game refuses to set 3D Audio and EAX even with "UseDefaultDriver=False" and a checked OpenAL setup then install the custom "PAX" drivers for X-fi and other Creative audio cards.
system.ini