If you get fatal error when launching Peggle Nights, try this;

• Open registry editor (regedit).
• Navigate to HKEY_CURRENT_USER > Software > SteamPopCap > PlantsVsZombies
• Find “ScreenMode” and edit it.
• Set its value to “0” (Default is 1).
• Launch Peggle Nights.

Fatal error should be gone now.