Eureka!
Success at last. I just finished re-building my system from scratch, and it appears that AH works! No dumps to the desktop, and no bumpy runway!
I don't understand why a perfectly functioning system with all previous versions of AH needed to be re-built to work with 1.03, but that seemed to do the trick nevertheless.
The only thing I haven't installed yet is AKwabbit's sounds, but I don't think that'll be a problem.
Those of you still having similar problems, you may want to do what I did and FDISK and FORMAT. It's a pain in the keester, but it may solve your problem like it solved mine.
------------------
P/O banana
XO 308(Polish) Sqn "City of Cracow" RAF