Just a final update: apparently, there are basically three things to remember when running Octopus under Win7.
  1. Run it in Administrator mode.
  2. Don't check the compatibility box for WinXP or Win2k, etc., just the "Run this program as Administrator" only.
  3. Run it from a folder that doesn't have quirky access permissions. I was running mine from c:\games\Octopus and it kept crashing on me. Copied the Octopus folder to the desktop and it seems to have fixed the last bug.