YaY, another person in the 8600GT graphics card stutter club with me! . I got it to work *OK* after some effort, but at first had trouble with driver crashes and it didn't work so well. I then made sure I updated to the the 178.28 combined display driver with Cuda 2.0, and it worked *a little* better. Then I installed the cuda Beta 2.1 drivers over the top, and it became slightly better again, and has been crunching ever since.
The system still gets periods where there is slowdown, but reducing the priority of the control app manually *appears* to have helped a little more, so I installed 'process lasso' to automatically set it to low-priority when the application starts. No effect on speed of the GPU crunching it seems, but the periods of lag & stutter are now infrequent.
HTH