I was having similar problems with IWD - this is the advice I got from Interplay:
"I am sorry to hear about the trouble you are having. It appears that the
game did not transfer the area file over correctly from the cd. You will
want to do the following:
Delete the files in the CACHE\DATA folder. To do this, in the folder where
you installed your game:
*Double-click on the CACHE folder.
*Double-click on the DATA folder.
Delete all of the files that you see in the DATA folder you have just
opened. Now try restarting Icewind Dale again. Hopefully this will help
with the trouble you have been having. If you do not have a DATA folder, it
is because you did a large enough installation of the game where this
information is already on your hard drive. If this is the case for you,
then just try the suggestions below instead.
If deleting the DATA folder doesn't help, you might also then try deleting
the files in the TEMP folder. The TEMP folder like the DATA folder is
located in the directory on your hard drive where you installed your Icewind
Dale game. Don't delete the TEMP folder itself. Just the files that are in
it."
Mine crashed in the same place with my characters milling around and complaining of being bored but were greyed out, after doing the above it sorted itself out....
I hope this helps.
bug 
Linear Mode
