Fortunately Disabling Catalyst AI won't stop you from running ATI AA, they have nothing to do with each other as each have their own individual tabs; although I still don't care for application forced AA.
Makes for some pretty horrific performance on a 4850

.
I am playing on an Athlon II 240 and 4850 and when I first installed borderlands it would crash within minutes on 10.7 and give general protection faults.
if you look around on the internet you will see tons of theories on how to fix this. For me, I disabled Catalyst AI and it did not work. One forum suggested installing a new version of PhysX from Nvidia's website, that did not work. Tried deleting, uninstalling and reinstalling borderlands from steam, that did not work.
What finally worked for me is that I uninstalled PhysX (because my General Protection Fault was referencing a PhysX file) and then uninstalled the game from steam and deleted all folders for PhysX and Borderlands that were not auto uninstalled. I then installed borderlands again and it installed an older version of PhysX that it was shipped with. Problem solved.
My understanding is that the PC version has a variety of problems, some relating to 10.7 drivers, some relating to different and newer versions of PhysX not working with the game, and some just a straight up massive memory leak.
I also understand that if you are just playing for a few min and it crashes it is NOT the driver that is the problem, but if you play for longer periods of time and it crashes it IS the driver problem.
Frustrated the crap out of me for 2 days but I am now enjoying very smooth gameplay with all seeting on high and with 1920 x 1080. anyways thats my story here.