The .lax file is the prefs file for OS9.
As for other suggestions--too many other possibilities! There something corrupt, but where! LW prefs? Java? OS?
First, you are entitled to Pro Support
http://www.limewire.com/english/content/proform.shtml
Second, could you give more details about your setup? You can copy many of the details from LW Preferences->Bug Reports->Sample Bug Report--just omit the sample java crash details.
More info can be found by opening Console (in your Applications/Utilites folder) and trying to see what it says when you repeat the problem. If there is a java or OSX problem, it should show up there.
I'm assuming the problem is not with your LW install since you did a clean install (also deleting the preferences and cleaning out the incomplete folder?). If the problem is with the OSX setup, restarting the machine and holding down the shift key right after the startup tone (Safe Boot), then running the Disk Utility on your hard drive and repairing permissions are basic maintenance routines. Then run Software Update from the Apple Menu->OSX Preferences.