With FW running, I needed to start the game at least twice because FW had difficulties reformatting the backgrounds and interface in one go. To set up a working solution, I had to set both swkotor.exe and FlawlessWidescreen.exe to Windows XP Service Pack 2 compatibility FlawlessWidescreen.exe needed to be Run as an Administrator. You shouldn't need any special compatibility settings to run either one, though the setup requires some. You'll need to run the game several times to get it working properly. The portable versions work as well as the installers. Use that one, unless your OS prevents you.
The 32-bit version works better than the 64-bit one. Here's what I've learned about using it with KotOR (Win8.1, 圆4, pre-GCN AMD APU): The program works really well, BUT it has its idiosyncrasies and limitations. Spinorial: Everyone should use this opportunity to download it and update their plugins.
