I ran into this problem as well. I tried the original disc and found that that worked perfectly. Then two things happened: 1) the length of the load times quadrupled and 2) I was annoyed that I was "giving up" by using my original disc.
To test, I created and burned an ISO onto DVD-R and found that the backup DVD worked perfectly as well. I then began poking around the game files I'd FTP'ed to my PC and I discovered the "swdirsXbox.ini" file that was previously mentioned here.
This is the original INI file from the game as it appears on the original game disc:
Original "swdirsXbox.ini" file from KotOR IICODE
[Alias]
HD0=d:\
OVERRIDE=d:\Override
ERRORTEX=d:\Errortex
TEMP=z:\Temp
MODULES=d:\Modules
LOGS=t:\Logs
LOCALVAULT=d:\LocalVault
DMVAULT=d:\DMVault
SERVERVAULT=d:\ServerVault
STREAMMUSIC=d:\STREAMMusic
TEMPCLIENT=z:\Tempclient
SAVES=u:\
CURRENTGAME=z:\currentgame
TEXTUREPACKS=d:\texturepacks
STREAMWAVES=d:\StreamWaves
GAMEINPROGRESS=z:\GAMEINPROGRESS
REBOOTDATA=z:\rebootdata
LIPS=d:\Lips
As you can It references the "d:" directory many times. I figured, why not change those instances to the actual game directory when running from the HDD?
So I revised the file by replacing each mention of
d: with
f:\games\Star Wars KotOR II. The latter is the directory you are most likely copying to. This will be the directory that 99% of people have backed up to. If you backed up elsewhere, you will obviously have to change to the appropriate game directory.
The resulting INI file should look like this:
Modified "swdirsXbox.ini" file from KotOR IICODE
[Alias]
HD0=f:\games\Star Wars KotOR II
OVERRIDE=f:\games\Star Wars KotOR II\Override
ERRORTEX=f:\games\Star Wars KotOR II\Errortex
TEMP=z:\Temp
MODULES=f:\games\Star Wars KotOR II\Modules
LOGS=t:\Logs
LOCALVAULT=f:\games\Star Wars KotOR II\LocalVault
DMVAULT=f:\games\Star Wars KotOR II\DMVault
SERVERVAULT=f:\games\Star Wars KotOR II\ServerVault
STREAMMUSIC=f:\games\Star Wars KotOR II\STREAMMusic
TEMPCLIENT=z:\Tempclient
SAVES=u:\
CURRENTGAME=z:\currentgame
TEXTUREPACKS=f:\games\Star Wars KotOR II\texturepacks
STREAMWAVES=f:\games\Star Wars KotOR II\StreamWaves
GAMEINPROGRESS=z:\GAMEINPROGRESS
REBOOTDATA=z:\rebootdata
LIPS=f:\games\Star Wars KotOR II\Lips
After modifying the file the game worked perfectly. No black screen, no getting stuck as the broken T3 droid.
I hope this fix helps you out. I'm going to go back to the game now.