Snuffleupagus - Were you able to create neighborhoods since getting Pets, or is this the first time you've tried? Try taking out the Downloads AND SavedSims folder. If you have a bad mesh, it could be in either folder and crash your game. If the game works without both folders, take a look at the thread I posted for agressivehobo.
agressivehobo - It sounds to me like you have a bad mesh. Take a look at
this thread and see if following it helps.