Some tips and tricks when in trouble:

Depends on whether you have now updated the game or not:

1a) A certain memory fix, the so called: "Large Address Aware"-patch could be used, if you not updated the game already, to stabilize Skyrims crashing behavior.
I also used this on Oblivion before without any problems, yet I don't know if Steam fully agrees to do so, but it does make backup copies of the original files, if you instruct it to do so.

Let me check if my 4shared-account still works: yep, try this:
laatidosetup.exe

You should have the: TESV.EXE-file modified by the LAAtido-patch.
N.B.: Do not use it, if you already used the official update from Bethesda (it won't work anymore then, so it seems).

1b) It could be related to Steam, but I am no expert on that at all, so please use the web, or other reliable sources to verify this.

2) Also if the default audio settings in Windows are set to high, the game might experience some problems:
I freely quote from other forums:

"My sound device in windows was set to output at 192khz 24bit. When I set this back to 44.1khz 16bit it fixed the problem!

So to check, in win7 go to Control Panel -> Hardware and Sound -> Sound

Pick your sound device that is set as default, click Properties.
Go to the Advanced tab and make sure the 'Default Format' it is set to 44.1khz 16bit.

I actually was able to set mine to 96khz 24bit and it works as well, just doesn't seem to like 192khz."

This problem mostly surfaced when entering the main menu or the introduction of the game.

3) Tweaking the graphics settings could improve things if you experience lag or odd graphics-glitches. Set it to at least medium quality.
(You might have found out that already.)

4) Mouse-lag can be mostly eliminated by setting the xbox360-controller entries to zero in the users skyrimprefs.ini file under the following headers:

[Main]
bGamepadEnable=0

[Control]
bGamePadRumble=0 (for the xbox360-vibration)

It might also help to add this:
bMousesmoothing=0

There may be more things to fiddle around with, but these seem to circumvent most regular troubles with the game.

You say when he hits the fire button so he is using one of those add on things similar to consoles? He had no problem in Oblivion? It could be a memory problem but I have heard that people who use those whatever they are called controls had problems with Oblivion. Just guessing on my part. He should try slowing down and see if that helps. I have had no problems but I have 4 gigs on both the laptop and the regular computer. The only crashes, rather freeze ups, is when Windows decides to do something in the background.

Which reminds I have problem with Steam. I can't get the 'play offline' button to work. I have to be plugged into the Internet to play the game. I was hoping if I could offline I could avoid those annoying automatic updates. I haven't figured out yet how to disable auto updates.

Sorry. I was talking about the mouse when I said fire button. (left mouse button) He isn't using a console contoller. Also, both he and I are using XP operating system. And no. He didn't have any problems with Oblivion, but he never added any mods.

I think he may have discovered his problem and possibly my smaller one, though. He found where to explore the virtual memory section of XP controls and it turned out his virtual memory was allocated to 0. When he reset the minimum to 5.00 and I think the maximum to 8.0 (not sure of these settings), the problem went away. Since then, I've checked mine and I had minimum set to 2.046 and maximum set to 3.0. According to the instructions on my computer, the recommended setting for virtual memory should be 1.5 of the amount of RAM. I (and my brother-in-law) both have 2 gigs of RAM. So, I have set mine up to minimum of 3.0 and maximum of 8.0. I will see if that also fixes my cell change freezes when I am able to get in the game tonight. (RL job work comes first.)

I've heard about the 44.1khz setting, but I haven't yet found out where - in XP - to check it, much less change it. However, my sound quality has been pretty good ingame. The only part that is real soft to hear is the initial startup song. Music, dialog, and special effects ingame have been fine.

I think my black blotches are quite possibly due to my video card. Last driver update I got was summer of 2010. I know there is a newer one out, but with nVidia it is sometimes better to wait awhile before updating driver. They don't have a really good record of bug proof. The latest one recommended to me by some Siemans driver tuner program was released in September, 2011. I don't know if this is the beta or a stable and confirmed one.

I believe you can play offline if you launch from Steam itself. I don't remember entirely, but I think it gives you an option for that when you hit the launch button. If not, there is probably a toggle option on mouse right click on the game in your library. I believe the right click/properties also has the ability to set your own update preferences. If not there, try support/properties from the game's page in your library. One caveat I discovered about those from New Vegas: after I opted not to auto update with that game, it got a little difficult to manually find the update I wanted later.

I am glad he found the problem. I should check the settings for sound on this laptop. Maybe that would solve my sound problem which is poor. Crashpilot said that the NVIDIA driver should be checked frequently. NVIDIA is always updating. I should check that too on this laptop. On my regulard computer I had it automatically. I hope I didn't lose my stuff on that machine.

Thanks for the tips about Steam.

Yep. He is having a ball now. So far, I don't think he has done a single quest, but he has found much treasure and ingredients just following the river.

I hate to speak too soon, but mine is working at least some better now, too.

Oh. There have been complaints on another forum about the patch Steam added automatically. However, it looks like most of those are from people with 64bit quads who downloaded and installed a program that allows the game to use more than 2 gigs of RAM. It looks like Beth (and Steam) have added something that prevents that program from working. Not sure, but I think they believe Beth and Steam are concerned the 3rd party program will allow the game to play without Steam validation and have added the patch to stop that.

That's why I warned for number 1a in my list if you had already updated/patched the game with the newest version.
And yes this enables the game to use more than it's constrained 2 GB from its maximum 32-bit (4GB) address-space. This was most helpful on machines with more memory (from 2 GB on to say ~3.5 GB, 64-bit or not). On 32 bit machines usually 2GB is reserved for Operating System address-space and the rest for applications. Since XP does not use so much address-space, this could be reallocated with this patch.

Both my desktop and laptop are 64 bit. My desktop has 8 GBs and the laptop 4 GBs. I thought about the program that allowed more allocation but didn't add it. So I have no problem.

I think, when my brother comes for a visit, I may look into a couple more gigs of RAM. My slowdown is probably due to swapping. This game isn't crashing, but it did worry me with the short freezes, especially when I passed large waterfalls and changed cells. I have the patch and it does improve my game, but it sounds like I could get much better play. Thank you for that information, Kosh.

Regarding the video, does anyone know where I can get the latest stable driver upgrade for the Nvidia 8800 card? I tried nearly all day yesterday and kept running into a couple of exasperating "tune up" programs that I don't want every time I reached a download point on their site.

Drivers are as always here: http://www.nvidia.com/Download/index.aspx?lang=en-us

Depending on your OS and by also selecting the: GeForce 8 series (or if you're using a laptop, select: 8M series) you can't miss it.

I spent several hours yesterday updating using Steams update program. It worked well for me but I have Windows 7. The graphics are slightly improved and so is the sound. Not great but better. Nowena, I get a few freezes on this laptop. Have no idea what is causing it. I have 4 GBs of Ram so that shouldn't be it. Could be the graphics. Windows 7 also takes a lot more RAM than XP so maybe it is the RAM. Ah, the mysteries of Windows are greater than those of Oblivion.