Meh you are correct about DX10 being only for Vista. I didn't look full into it before thinking it might be an option.
I don't run the game in windowed mode very often. I did recently and did not notice the error - I can't put that off as a solution, though, because of the no rhyme or reason. There's not any specific amount of time it decides to happen. Nor is there a specific incident in game that causes it. I thought at first it had to do with spinning the camera at a bad time, overloading the card by forcing it to render to much but then it started happening when the camera wasn't moving at all.
The error has also occurred with no alt-tabbing whatsoever.
ETU: Been playing in windowed mode all day and haven't had a single crash. Seems to be a definate work-around, I just need to suck up the lack of edge scrolling.
Of course now that I say that...