I can't reproduce the error. Both queries run ok on SQL Server Management Studio / SQL Server 2005. Have you updated or asked the host to to the latest MDAC?
Full-text searching is a whole approach as opposed to a quick setting to change - you rethink the way datasets are requested as a set of PK's, then get the values from those. It can be a wee bit complex, but far from impossible.
Something that may help you for the future which seems to be less well understood than it should be - UNION's - UNION will join and dedupe two identically shaped datasets, UNION ALL doesn't do the dedupe. This can mean you return more records (depending on the query), but if that's not a problem, UNION ALL can save a huge amount of time on large datasets. Try a few experiments, you'll see!
Often you can rewrite a UNION query to use UNION ALL, maybe by using EXISTS or IN and subclauses. You may find you can set your performance on fire by not having to dedupe massive datasets.