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The game doesn't continue at this point. It's like I dont press accept and the waterfall continue to fall and the characters move but nothing happens. I didn't have this problem before.

0.9.4, I can't even use this one cause it crashes upon starting a game, i've tried different on all settings.

0.9.6 This is the one that is far the best. havent had problems in the past before I ran into this.

beta r1888 Worked fine but more freezes than 0.9.6

No problems in computer specs as the comp is new and i get great FPS.

Grapichs: GSdx 1873 0.1.15, SSE41 (Hardware) Native res.
No speed hacks, no frame limiting.

Computer:
CPU: Intel i5 2.67 GHZ
Grapichs: ATI HD4870
RAM: 3GB
OS: XP Pro

Just want to know if anyone knows how to get past this point.
If you want more info then just ask

I've also tried doing the boss several times and it still freezes at the same point

PCSX2 settings?

I can't even launch this game succesfully, to be honest.

Just looking at your screen shot I can see that you have a better handle on the settings than I do. We have almost the same rig (mine is barely better) and I don't get 89fps. Plus I'm at 99%CPU and you're at 68%. Sorry about the freezing. I thought that one was playable all the way through.