Interesting. So, on Windows 7 (or basically Vista and newer), an application should not be able to bring down the entire system unless there is a problem in some driver or hardware issue somewhere. So Terragen is triggering something, but the system shouldn't be going down entirely unless there's something else wrong. The fact that you had a graphics driver crash later suggests it may be related to that, but hard to say.
To start Terragen with flags you need to edit the shortcut that you use. Right-click your shortcut and go to properties, then edit the "target" and put the flags *after* the ending " quote that should be ending in "tgd.exe"
However, given that the crash happens during rendering, it's questionable whether this will help as Terragen only uses OpenGL (and the graphics card in general) for the user interface and 3D preview in particular. Those flags turn off the 3D preview and node network, the most heavy OpenGL users in TG. But they're not really used during rendering so it would be odd to have a graphics driver related crash from rendering. Not impossible, but odd.
- Oshyan