Eureka! When the game ran flawlessly after I "deleted" the file, I figured there had to be something going on in Windows-land, since the only logical explanation was that Windows decided it's smarter than me and I didn't REALLY want to delete that .ini file, did I? I did a search and came up with only my backup copy of the file, so I assumed all was well and the game should crash (for once on purpose!), but it didn't. rudewarrior reminded me that one of my mods may be using its own copy of the file, and sure enough one of them is, except that didn't come up in my original search. This is because Windows only looks in certain places by default, and apparently the MODS folder isn't one of them. Once I told Windows to search everywhere, it pulled up that version and a version in AppData\Local\VirtualStore....a consequence of me installing SH3 into the Program Files folder, I'm sure, since Win7 loves to make sure you can't actually delete anything it deems important.
To this forum's credit, there are probably a dozen or more threads where it's mentioned that you should NOT install SH3 into Program Files, and this is one of probably a hundred reasons why. Alas, I didn't see those threads until I'd already re-installed the game, and until how I hadn't had any of the problems others have been plagued with. Time to re-install everything! Woo!
Thanks to rudewarrior for setting me on the right course.
