Sounds like (and I'm just guessing without all the details), that your rig is not stable when hyperthreading two clients at the same time, at it's current O/C.
Micro-code is just not as capable as it's silicon hardware it is standing in for.
When you run one 5.04 client, you have no problem? Are they running both as services or console windows, or one and one?
Are you folding with big packets=yes (in your client.cfg file), or no?