I found the fix for KOTOR not being playable on computers with Intel graphics adapters.
Im a technician, and this was driving me crazy! The game would fail, and lockup the computer, with no errors to go off of. But mainly, the game wouldnt even launch to start. This even applies to TSL.
After researching... I came across this...
http://support.intel.com/support/graphics/sb/CS-008649.htm)
The link speaks for itself, so there is no need to step you through the settings changes.
I know my hardware could use an upgrade, but for those of us with similar specs... this is your quick fix.