One rule is to avoid packing executables with Powerpacker, because some times the decrunch code will trash the data cache resulting in a system crash. If you have programs packed with Powerpacker decrunch them or recrunch with Imploder if you really need.
How to make most games and demos work on 1260:
1. Disable the data-cache. "Cpu nodatacache" from cli will do.
2. Move the VBR back to chip. Use Aminet/util/misc/vbr.lha (2k)
Make a scriptfile that does this for you, and if a game/demo doesn't work then run the script.