Those horror stories sound a bit exaggerated. I've never heard of the game actually causing troubles outside of itself. It was horribly buggy when first released (thanks Atari, for putting Troika out of business), but it actually didn't take too long before (fan-made) patches fixed the big problems and the game was very playable. Since then, even more mods have come out, improving the ToEE experience. They've even almost completed a complete fan-made game, using the ToEE engine. Anyway, here are some important facts you'll want to know.
The downloadable version of the game is not reliable. Some don't have problems with it, but many many do. If at all possible, you should get a hold of the CD version, preferably the cardboard box and not the jewelcase, though either is better than the download. You can find it on ebay pretty cheap (I got a second copy for $5 after shipping).
After you have the game installed from the CD, you'll want to use Atari's SECOND patch and NOT their third. Instead of the third, you have two fan-made options. Patch three basically was an "official" copy of a fan patch, but one that (i) left out some very useful bug fixes, and (ii) isn't compatible with any other mods/patches out there (they were all made for patch 2 and patch 3 was being ignored, so the mods have never been recoded for patch 3).
So now you've got game + patch 2. Now you have two options.
First, you can just go with Moebius's "temple.zip" (sometimes referred to as "temple.dll") fix. This is the patch that Atari basically copied (badly) with their patch 3). With just these two things, the game is perfectly stable and you're all set. The setup is fairly simple, and you don't need more. I ran the game like this for a couple years with no problems. (Some experience a problem starting the game with this setup - they just get a blank screen - the solution is a bit hush hush, so PM me if it's an issue.) "Temple.zip" is compatible with several other convenient mods, such as Drifter's "humble NPC" patch, which makes NPCs in your party far less annoying.
Your second option after applying patch 2, though, is to install a really nice suite of patches combined together by the modding community at co8. To get the latest install info on their work, and very helpful install advice, go check out the forums at co8.org. They're extremely generous with their help.
It should be noted that the co8 mod does include the Temple.zip mod, so it's not so much a different option as it is an alternative, fancier, and suped-up way to get Temple.zip AND a bunch of other things as well. It should also be noted that the co8 mod includes changes that increase the difficulty of the game. As there are far more people complaining the game is too easy than that it's too hard, this is almost universally considered a good thing, but might be a better option AFTER you've run through the game once. If all you've installed is patch 2 and temple.zip, you can install co8's mod right over it. At least I did, and had no problems.
I hope that helps. If any of it's unclear, just lemme know.
