cool...we''re narrowing down the problem here!
after doing a runtime debug, i immediately got a error with trying to lock the vertex buffer which exceeded the buffers size. so i quickly fixed that.

now the only feedback im getting about the settexture() is the following:

Direct3D8: (ERROR) :Texture not created with this device. SetTexture failed.

im not seeing any though...right now im looking thru the source to see if im reloading it twice or anything like that.
i put print statements everywhere where things are created and destroyed. so far, everything looks fine.

Hmm...after fixing my vertex buffer locking issue, the settexture now return an error. This is a good thing since we are now getting somewhere.

the dx sdk doc says settexture returns negative values for errors. this is the error i got:

FAILED: -2005530516

to which HRESULT does this correspond to?

hmm..after further investigation i was copying my vertex buffer with an incorrect size. this solved virtually everything i was referring to before!

thanks for all the helps.
thanks.
thread closed.