I'm not sure if the issue is specific to dx 9.0b and or actually affects other dx versions and OSes, but I discovered last night that if netmeeting is running (remote desktop sharing is enabled, or the netmeeting box is just up) it screws up direct 3d. no direct 3d games would run, and the dx7 direct 3d test in dxdiag would error with "test failed at step 8 .......) exited out of netmeeting, and problem solved.

I'd be interested to see if the problem can be reproduced on other OSes (running windows XP) and other DX versions.

I've reproduced the problem on 3 XP boxes with DX9.0b.