What graphics card do you have? I had my Radeon x1650 Pro set to "High Performance" under the Direct3D tab and it made my custom face look similar to that (blotchy), shifting it up to "Quality" solved that.
x1650 Pro problem eh? Damn it. Mine is PCI-E and 256Mb by the way.
I'm gonna try some older drivers, see if that ATI problem in the stickied thread is having an effect.
I have also had the game reset my computer on a few occasions with this new patch, although a simple crash to desktop is more frequent.
Athlon 64 X2 4600
2Gb RAM
Sapphire x1650 Pro