El Foro

ye sorry thats what I meant, I did that when following your guide, I have checked and its still unticked

Ok good.
Dang, I'm really stumped by this one.
Normally those missing 32-bit libraries, steam overlay and video drivers are the problem.
Your debug doesn't show many errors, just lots of fixes.
I doubt the ALSA overrun is causing the game to crash.

Are you using the virtual desktop like in the guide?
Try this... instead of clicking Play, click Options and try lowering the graphics settings.
Maybe turn off V-Sync, antialiasing, etc.
Then try again.
Also, we can skip the Fallout 3 Launcher as well to determine if it is causing bugs.

My Borderlands 2 guide had problems with the "launcher" so I just skip it.

ye when I click steam the virtual box loads up and steam in it.

I set the graphics to low but still no joy

could it something to do with the fact the direct x installing step 1 of 1 keeps appearing every time I try to run the game?

ye I did the xlive.dll step

I will have ago at the windows 8 tips as well.

Who knows if it will fix the problem. I wonder what version Fallout 3 is patched to on Steam?
The patch I mention in the guide includes Games for Windows Live. So either you have to install it, or use the xlive.dll to allow Fallout to launch.
So this might be the problem, but I'm not sure why the xlive.dll isn't working for you. Maybe because the dll is used by Steam?
Who know...