Do you have it entered as "EnableCheats=1" or "Enable Cheats=1"?
While we're on the subject of the swkotor.ini file, is there any way to force the game to run the .bnk videos at 1024x768 using edits to this? I'm running KOTOR and TSL on a laptop with ATI Mobility 9000 graphics, and it still plays all the cutscenes in (I think) 640x480. From what I've heard and read on these forums and others, however, I feel fortunate that I got it to run on my laptop at all. (Dell Latitude D600, ATI Mobility Radeon 32MB video, 1GB DDR RAM, 1.6GHz Pentium M processor. It originally came with a 1.4GHz Pentium M, but I swapped it out for a processor out of an old HP laptop...about the only thing out of the HP that still worked!)