heheheh, thanks for the humor, I seriously needed that after cursing two hours straight because of frustration. Seriously though... what could be causing this?
Well, that sounds like a really old nvidia driver -- I believe it was the 77.77 version (or around there) that was the last stable version with the sim, though some folks have reported success with the very newest ones.
But it also sounds like something got corrupted. First thing to do is delete the 'groups.cache' file that you'll find in your /My Documents/EA Games/The Sims 2 folder. That file caches a lot of dynamic game stuff, and is also prone to corruption -- lots of us have cleared up very odd problems just by deleting it and letting it rebuild (it'll do so next time you load the game).
If that doesn't work, you may have to delete the thumbnail files next, particularly the one for the neighborhood (make a backup first, just in case!). Beyond that, you might need to reinstall the game, maybe.