It appears other people are seeing that Grub error, judging by the A7N266-VM post today. That's the exact same "out of memory" type error that I had.
I think Asus changed something with APM or APIC that is causing problems. I know 1.03 added support for LBA48 harddrives (i.e. >137 GB drives). I'm almost certain flashing system 2 to 1.001E will fix the problem, but will probably require a Win2k and Linux reinstall to work. I was hoping a newer kernal or driver might fix this...
It's strange that both systems are totally stable under Win2k, but only system 1 is trouble-free under Linux.
The only real difference is Video card and bios revision.