KotOR has a thing against duplicate heads (your head is expected to be unique). If you choose a head that is the same as another model in the game, then when that model is displayed, the game will try to use backuphead specified in heads.2da. If there is no alternate head (as in the case of some NPCs) then headless-horsemen effect kicks in. Crashes occur when the game tries to make them talk.
Try selecting a standard player Appearance in KSE (those that begin with "P_"). Every NPC that has these standard heads as their primary head are also defined with backup heads.