Thanks for the suggestion but I think this cannot be the reason - I'm using an external monitor (my LCD is turned off) that is capable of 1280x1024 resolution. My desktop is also 1154x864 and I play other games on 1154x864 without problem (GalCiv2 also loads without error using this resolution).
I'll try to disable the on-board sound chip if it helps, also I'll try the regional settings thingy. I'll report if they help or not.
And yes, Omega drivers are the latest for my graphics card, they are based on ATI Catalyst 6.2
UPDATE: Ok, I tried both disabling the onboard audio and changing the regional settings to English, doing this didn't solve the problem. However, I experimented a little more with the game, it seems I am able to start a new game and such ok. Most surprisingly, when I accessed the video options menu 'from the game', I was able to choose brightness ok, no freezing. And - I tried to acces the brightness setting video menu again via the main game menu - it freezes again!