Your issue could be driver level. Your crash error references a memory overflow due to large texture size. Essentially, there was no more room in the buffer for 1024x1024 textures. This error is not related to your resolution. Reduce texture size will likely correct the problem. 512x512 is commonly "High" in most games and I'm not sure the differences will be apparent to you. I'm sure you have updated your videocard drivers, but I think the northbridge could be the culprit. Try updating the chipset drivers for your motherboard. Your northbridge might have outdated drivers resulting in poor SLI controller operation.
While I agree that your SLI setup should be able to handle this it is likely a glitch with the SLI implementation either in drivers, software, or at the northbridge. I always thought SLI worked on a firmware/hardware level that operated transparently to software, but it may be that Cryostasis engine doesn't properly implement SLI functionality. If this is the case, then perhaps disabling SLI will result in better performance. Sorta how Left4Dead ran better in single-core than multi-core mode because of a glitch in implementation.
The green screen glitch sounds like a driver error too.
As far as your comments regarding PhysX: it is simply marketing junk to lure consumers to buy NVIDIA cards. It's not that cryostasis's physx sucks, it's simply that physx sucks in general.
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