Game Freezing in combat while Pad is connected

Details:
Playing with a wired Xbox 360 pad. Everytime I engage in combat, my game freezes. When I unplug the pad, the game continues as if I was in an R0 situation.

Steps:
Was previously using a PS3 pad, but the connection kept dropping from it, so I bought a wired 360 pad (official one). Installed the drivers before I plugged it in. Had it working fine until I began a guildleve. My game froze and would not exit when I tried to kill the process in task manager. I later found out that unplugging the pad unfroze the game, but the pad would no longer work until I restarted the game.

Date & Time:
27th May 2012 17.00 GMT+1

Frequency:
Under certain conditions - When engaged in combat

PC Manufacturer & Model Number:
Homebuilt Computer

Operating System:
Windows 7 64 bit

Graphics Card:
NVIDIA GeForce GTX 275

ISP:
BT infinity

Type of Internet Connection:
Optic Fibre

I'm having this problem as well. My game freezes up and I couldn't even shut it down with the task manager. After I saw this topic I tried unplugging my gamepad and it unfroze and sent me back to the character select screen

happening to me as well, using the official controller. Except the whole PC freezes.