Ok, very simply, I installed Patch W, and now when I click the 'Race' button from, say the single-player, or hotlap menu, the game freezes instantly on that screen, and the only thing I can do is restart my pc. The MOUSE still moves, but I just have this 'screenshot' of the LFS game menu and I have to restart.

I seem to remember this happening sometime before, but I could be mistaken, and if it did, I don't remember how it was fixed (I think it may have been when I installed Patch V2).

Try to revert to older patch and check if it disappears. It's the simpliest thing you can do.

Can I just install Patch V2 over Patch W?

Yes.

Where can I find V2...? I seem to have lost the file.

Ok, V2 works fine. I guess my next task would be to progress through the V-series...

try updating your graphics driver, make sure you have the latest version