Hi!
The kickstarts crash you speak about is not a bug, it makes sure you have at least one available and have it named correctly. Its all in the readme that came with the release.
*EDIT* Just read your post again

, and I see the problem you had was that there was no message explaining this, I'm pretty sure one of the coders could add a small error function to display messages explaining the crash, but this would take a while to get right(if possible). It would also be a bit silly to add a new functions to check for individual errors, so a universal error catcher and message displayer would be needed, but would take up a lot of time to code and get right, I guess. Im not a PSPUAE coder/developer, so this is all speculation based on previous discussions, so I would wait for a response from one of the coders, most likely FOL since he handles public relations on behalf of the coders

*EDIT*
What type of files are you playing your games from, ADF(.disk) or States(.asf)?
It might have to do with the config files(.options) in the CONFIGS folder being from older versions. Parts of those configs are probably trying to set the memory to illegal amounts or to options that are not available anymore in the new release.Because you zipped them they will no longer use their old configs because the files names are different, although Im not sure if ZIP files use the config files at all anyway, eg. AnotherWorld.adf would have a config called anotherworld.options. so when you load that ADF the config will load automatically, but if the config was for an older version, it might not work.
Possible Solution:
If you copied over your old PSPUAE install, then I would suggest removing the entire installation from your memory stick, which would be the PSPUAE folder. Then copy the new release into the correct place, as well as your games(ADFs or save-states(ASF)) and then try again. Do not copy your OLD configs across, use/make new ones.
Thats the only solution I can give with the little amount of information you have given.
I hope that helps.