Probably you are doing something wrong, try renaming your Steam folder and then run nosteam, if it will run ok then you will know where problem is.
I am using Counter.Strike.Source.2010.Orange.Box.NoSteam.[Setti] and I suddenly started getting the error "You are in insecure mode. You must restart before you can connect to secure servers.". I didn't change anything, it just stopped working. I do have original STEAM CSS installed also though. I was told that it is causing the problem but I edited the registry as explained in one of the previous posts and it didn't help. STEAM CSS works fine but I would rather use the standalone version. I have been using the standalone CSS and STEAM in parallel all the time with the ols CSS game and never had any problems.
I have just installed patch 9-to-10 and still have the same problem.
Does anyone have any other tips ?
I have Steam installed too and never had any problems with nosteam, exept that one time when i forgot to delete Steam registry before running nosteam.