What kind of errors are you getting exactly and are those errors occurring only with booting OS X or also with loading other OS'es?
In case of errors occur when loading OS X you might want to try to boot with:
UHCIreset=Yes , USBBusFix=Yes and/or EHCIacquire=Yes
These are the boot arguments...
My GT240 worked out of the box in 10.6.8 and Lion with Graphics Enabler=Yes .
Chameleon does a good job with detecting the card quite well I think.
For optimal performance in Lion I put the EFI string for my card in com.apple.Boot.plist and let out the Graphics enabler part. It makes 2D and...
As you had "arch=i386" in your com.apple.Boot.plist or org.chameleon.Boot.plist I assume you were running OS X in 32 bit mode.
Lion only can run in 64 mode (AFAIK), which means that load times could be a lot longer compared to loading in 32 mode.
I experienced the same with 10.6.8 , 32 bit...
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