"Virtual Mode Extensions is a hardware enhancement Intel added to their CPUs beginning with the DX2 models. All Pentium processors also come with this feature. VME is intended to speed up a number of privileged functions (CPU instructions) for applications running in virtual mode sessions (for example, DOS and WinOS2 sessions).
DOS (and Windows) apps running in an OS/2 Virtual DOS Machine (VDM) believe they "own" the hardware. On occasion these apps will try to do something to the (virtual) hardware that isn't permitted while a protected mode operating system such as OS/2 is in control of the real hardware because permitting such "privileged" operations would negatively impact overall system integrity and reliability.
On a non-VME processor attempting such privileged operations would result in a (hardware generated) program interrupt, and hence an operating system (in this case, OS/2) interrupt handler to get control. Control would eventually pass to a routine that would simulate the attempted function. On a VME processor the function simulation would be carried out by microcode on the processor itself. This is both transparent (to the operating system and app) and faster, BUT only if it works<g>.
Unfortunately there are apparently some conditions that can arise where this (usually) transparent handling of privileged operations (in effect, a hardware implemented microcode "assist") can leave the system in an inconsistent operating state. In this case the operating system will force a TRAP condition to protect itself (and YOUR data).
Adding the "VME=NO" line to "CONFIG.SYS" forces all VME "assisted" CPU instructions to be reflected to, and handled by, the operating system; in other words, the way it would have worked had the VME feature not have been present.
"VME=NO" is not a panacea fix for all your DOS/Windows woes. Indeed the most common symptom of VME related problems is frequent "Trap D" and "Trap E" errors in DOS and WinOS2 sessions. Therefore, I doubt it will correct all the problems you've listed, but it MAY provide some relief. Can't hurt to try.
Ron Higgin OS/2 Advisor! (see EMail Addresses)"