Hm... I am playing through TS7.02 now, and I ran into the same problem Kath27 describes.
Valygar gets short-circuited and repeats the same "I never was one to..." speech over and over.
Looked into the script "bgtnodlg/aBVALYGA.D" (even though I posted about BGT problems earlier, I am playing without it currently, with TS installed on vanilla BG2). Apparently, "VP_SlayerBanter" local variable is not being set to 3 properly. Setting it manually solves the problem, as it seems. Though, after I got out from Spellhold and rested in the Brynnlaw tavern (a romantic encounter between the protagonist and Valygar has happened), the "VP_SlayerBanter" was reset to 2 again and the banter started running again
On a side note:
After the Spellhold a banter between Kachiko and Imoen has happened also. Or, should I say "monologue", since after Kachiko told Imoen that she glad they escaped, Imoen didn't reply anything and the dialogue just ended. Is it how it's supposed to be or it's yet another bug? If it's the latter, I wonder if it has any connection to Valygar's bug...
My current installation: BG2 + Baldurdash WeiDU 1.66 (fixpack and dialog fix) + TS 7.02 + The Wheels of Prophecy + Rogue Rebalancing 4.11 (all components except the revised potions) + BG2 Tweaks (only several components) + Zyraen's Miscellany (improved statue of riddles, expanded ranger spell progression) + 1PP mods.
Despite all these minor problems, TS is a really wonderful BG2 adventure, and this time I am determined to finish it no matter what
(played it once several years back, but the installation got buggy and after I failed to keep Yoshimo in party in Spellhold, I dropped the game...)