Had exact same issue. What has worked for me is to simply "alt-tab" after the error message (do not touch the error message itself)...it takes me back into the game and it plays fine afterward. Also...to greatly reduce lag-like stutters I turned off "tripple buffering" in Nvidia control panel.

eVGA 680i
qx6700 @3.47ghz (A.C. Freezer 7 Pro)
(2)gigs Corsair xms2
(2)150gig WD Raptors (raid 0)
(2)eVGA 8800gtx SLI (621, 972)
1K Watt Enermax Gallaxy
X-Fi x-gamer
CM Stacker 830
Windows XP-Pro sp2/ Vista Business
3DMark06 = 17,724
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