Alright well it looks like I have an update.
I tried different video driver versions (ATI Radeon X850XT), removing Service Pack 3 and reverting to SP2, and installing the game on another machine (also Windows XP SP3), none of which worked.
I was just about at my wit's end with the whole thing when I tried experimenting with the compatibility settings for the Fallout executable (right click ---> properties, then Compatibility tab) and discovered that when either Windows 98/ME or Windows 95 compatibility mode is enabled the mod now works!! Which of course is the opposite of what was intended.....
If it gets updated I hope this helps you fix the next version. Yay, happy ending