The hyperterminal capture looks OK and there aren't any errors which point to it being a drive problem either.
Might be best to go back to 2.00 final. First thing I'd try is another upgrade but to 2.00 final instead. If that's OK, then try 3.0a8 (which I've had no major problems with).
The error might be something like "BUG IN DYNAMIC LINK LIBRARY" or something like that. It's definitely not a complete error. I grepped the kernel source for for the string and didn't find anything and it doesn't appear the player has started yet, so I'm not sure where it's coming from.
I assume you can't Ctrl-C and get a terminal prompt or anything like that?
In absence of any other ideas, try the upgrade (or downgrade really) again.
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Christian
#40104192 120Gb (no longer in my E36 M3, won't fit the E46 M3)