found an official post about this, lemme quote:

I'm pretty sure 1.7 is one of those patches that should be avoided. As far as I can tell, it offers a few tweaks, fixes nothing, and BREAKS several things.

I installed it after my first time through the game. On the first run through, I had no problems the whole way through. After 1.7, a couple of items like the Jackboots can't be suppressed, Dreghen (and other characters I guess) won't talk to me, etc. I oughta know better by now...