What Joy said.

Make sure your DirectX is also up-to-date.
I've had this "deadly" occurrence happen a few times... mainly due to lack of free memory in my computer's system. (also partially due to the fact that my laptop did have a bad habit of running hot, so making sure that it's well ventilated where the fan is located was necessary in my case.) I had a whole lot happening in certain neighborhoods that it happened in, though... like a lot of decorations, lots, families, large terrains, etc. Depending on how old/updated or how well your video card handles graphic limits, you may be able to play the game without too many issues... but once it starts getting on in its lifetime, it may or may not be able to handle large neighborhoods like it once used to.
Even after updating my video drivers (as best as I could considering Dell doesn't support driver updates for my laptop model anymore... :tongue6:) and my DirectX files, it happened after a certain period of playing the game. But, one thing that did help in limiting this from happening too much on my end, though... and believe it or not, it does help:
making sure you do a frequent disk "clean-up", and defragmenting your hard drives frequently. That helps the computer to run a little better, and considering that The Sims 2 and its EPs take up a large chunk of space on most people's hard drives, it does help a little in computer performance. (though not completely fool-proof). Also, making sure that there aren't any background programs running while the game is on. As long as there's enough free space and available memory while the game is running, that will happen less.
If all else fails, though... there's always "windowed" mode (aka, right-clicking your shortcuts to the latest EP you run, going into
Properties, and adding a single space and
-w after the quoted location in the "Target" Box). I find that more convenient, seeing as my own video card insists on screwing up every time it tries to resize the screen to the game's set resolution. That, and there's no "blue screen" and way less red flashing than before.

(Yeah, I know I'm wordy right now, but just throwing out any possible means that've worked well for me. Hopefully they'll help you out. :angel:)