An interesting problem...can anyone else confirm:

[Mel]

I just went out and bought Valve's 'Orange Box' today, and neither HL2 Episode 1 or Portal work with the iZ3D driver enabled ( HL2E2 works fine. I haven't tried Team Fortress 2). Both of them load just to the point of showing their main menus, at which point the standard "This program has encountered a problem, blah, blah, blah, dialog appears, then back to the desktop we go.

I've uninstalled/reinstalled the driver (v1.05.0002)...same problem. Reboot...same problem.

System info (from dxdiag)

Operating System: Windows XP Professional (5.1, Build 2600) Service Pack 2 (2600.xpsp_sp2_qfe.070227-2300)
Language: English (Regional Setting: English)
System Manufacturer: System manufacturer
System Model: System Product Name
BIOS: Phoenix - AwardBIOS v6.00PG
Processor: AMD Athlon(tm) 64 X2 Dual Core Processor 5200+, MMX, 3DNow (2 CPUs), ~2.6GHz
Memory: 2046MB RAM
Page File: 412MB used, 3526MB available
DirectX Version: DirectX 9.0c (4.09.0000.0904)
Card name: NVIDIA GeForce 7900 GS


Has anyone else encountered this?

[Mel]

I had the games' resolution set to the monitor's native 1680x1050. I reduced the resolution of the games to 1440x900 (still at the monitor's native 16:10 aspect), and the games run fine.

Something that may be important: I have a HL2 hi-res texture pack installed from playing HL2 (original game, not episode 1 & 2). Perhaps the new episodes load more of these textures that the original game, and thus crash the video card. Just a guess.

[Mel]

OK. 4 of the 5 HL2 games are working at the lower rez: HL2, HL2 Ep1, HL2 Ep2, and Portal. I still haven't been able to get Team Fortress 2 running with the iZ3D driver enabled.

[Neil]

A new driver should be out very soon. I don't know if these games are on the list in particular, but there are going to be a LOT of bug fixes. I'm sure it's going to be well worth the wait.

Regards,
Neil

[KindDragon]

It may simply lack the video memory. Try decrease video settings without driver and then run with driver.

[Mel]

All 5 games work fine at full rez (1680x1050) if the driver is disabled.

I guess I'll wait to see what the new driver version brings.

[KindDragon]

Driver use additional video memory for correct presentation post processing effectы. There is likelihood that is driver bug, but may be you just doesn't have enough video memory. Try reduce resolution, video settings and run TF2 again.

[Mel]

Driver use additional video memory for correct presentation post processing effectы. There is likelihood that is driver bug, but may be you just doesn't have enough video memory. Try reduce resolution, video settings and run TF2 again.

I disabled the iZ3D driver so I could get TF2's menu to show. Set rez to 1024x768, set all render settings to 'Low'. Exit game. Re-enable driver, restart, crash before menu.

[ZantarV]

I'm having the same problem. How did you change the resolution if the game keeps crashing?

EDIT: on Portal ^

[KindDragon]

Disable driver, change resolution and than enable driver.
Which driver version you use?