I have the sims and if i install any expansion pack after on holiday, it will crash after the splash screen, i went on their website and they only told me simple things i had already checked like hardware acceleration, drivers etc. and it still doesn't work.
The sims 2 has really bad graphical corruption and freezes everytime it tries to load a new object.
About 4 or 5 years ago when the original Sims first came out I experienced similar problems to this, and it turned out to be the graphics (I only had onboard).
Have a look on the back of your PC and if the monitor plug is around the keyboard/mouse area then its onboard, if its near the bottom of the case then it would be a seperate card. (rough guide).
Then about a year and a half ago when the Sims 2 came out again I experienced display problems. I later bought a Nvidia FX 5900 Ultra and that seems to have rectified the problem, so I think it is the Graphics on your PC not being very good. The Nvidia 5-Series FX are really cheap now though, about £30 on eBuyer I think, so it may be worthwhile to upgrade.
DXdiag has no problems. the pc has been formatted and reformatted twice since the problem started. The drivers have been updated 4 times since it started and the same discs work fine on my friend's computer with the exact same specs exept less Ram and only 1 hard drive.