My PC config:
E6750 on Gigabyte 965P-DS3P with 4gig RAM, Audigy 2ZS, some hard drives , and Gigabyte GTX275 (896M) with Windows 7 x64

I currently use Nvidia driver 190.62
Basically, any newer than 195.xxx (including latest 257.15) I get occasional black screen freeze with sound loop, which lasts for approx 10 second. After that, all goes back to normal.
It happens like once in hour or few hours, but you can imagine mayhem it can make

As said, tried now even with latest 257.15 drivers, but due to same issue had to revert to the old ones.
In other games I don't have any such issues.

Would this not be a bug with the nVidia drivers, rather than LFS?

Quote from Degats :

Would this not be a bug with the nVidia drivers, rather than LFS?

Probably not, if it works with other games.

Take a look at your sound drivers while your at it.

I have tried also with various sound driver versions. Latest ones have issues, again especially in LFS - crackling and similar noises. I had to revert to somewhat older ones which work OK.
However, the issue forementioned happens with any newer version of Nvidia drivers.
I may try latest version of both drivers and see what happens.

I have the latest version on Nvidia drivers with GTS 250 and no problems with lfs

I'm on 197.45 (WinXP) and LFS works just fine. But whatever the problem is, it's much more likely to be on the nVidia's part....