Make sure to not update Penumbra: Overture with Penumbra 1.1 patch, that patch is for the tech demo and not overture.
You can find the latest update here:
http://support.frictionalgames.com/entry/66/
Not sure why the game crashes when you try to launch, please attach the hpl.log file located in my documents/penumbra overture/episode1/ and it might give us a hint.
As for graphical errors:
There are problems when running some ATI cards in Vista and it also appears that the same problem occurs with the latest ATI cards in XP as well. We have been working for a very long time trying to find the cause and at the moment it looks as though it might be a driver issue, ATI is currently looking into it as well. Unfortunately at the moment there is no estimate on when a fix will be available or any known workarounds for the problems.