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Every time I use this tool it fails to complete the closed line I'm trying to draw. It continually stops in the middle of me drawing a line and closes off whatever it stops at after I remove the pen from the wacom tablet. This is making even simple selections painful to accomplish.

I have restarted the program mulitple times and it doesn't help. When it happens I have no more than 500 megs of RAM being used by the program so it's definitely not a lack of RAM. I have also done all the setting changes  suggested (multicore = 1, scratch drive chosen, undo levels = 40, memory usage = 80%) by people with no effect on the tool.

Please look into this tool because it is definitely giving me issues!

Edit: Something I also am noticing is that most of the time I will see the screen flicker for a split second right before it starts ignoring the line I am still drawing, I really do believe this is some kind of bug.

Lasso was working weirdly for me in painter 11 and 12 and generally lead to crashes in painter X... I try to minimize its usage in painter where possible.

Yes, selecting and using the Lasso has been a bit iffy for as long as I've been using Painter. It's gotten better but I tend not to rely on the tool much myself. If you need to make complicated selections I'd look into Channels - if you haven't already. It's easy to paint in a selection and you can add to or erase the selection/mask without worrying that the tool is going to blip.

Yes, all the selection tools currently have bugs in 'em.  They all close or don't close, or miss off selection areas (polygon selection deletes points selected) at random.  I've even had them corrupt the layer, so I'm also currently avoiding using them until they're fixed.  They weren't too bad for me in P11, just too temperamental in P12.  Joe's suggestion seems good.

I looked at trying that after you guys suggested it but I couldn't figure out how to paint on a channel while still seeing what was behind it, every time it completely covers whats behind it so I was unable to get it to work. 

I guess I need to dig into some tutorials or something because this one isn't readily usable either. Anything better than the crap selection tools in an improvement though, the current selection tools are quite pathetic for someone coming from photoshop.

What I do is first open the Channels palette and click on New Channel at the bottom. This new channel will cover your artwork with a "layer" of pink mask. I suggest giving it a name as you need to select the name from a list. You will only be able to paint in greyscale - white erases the mask while black adds to it. 

(In Photoshop the colour swatches change to B/W but it appears not to be always the case with Painter so don't be fooled).

Once you've erased a section of the mask, click on Load Channel as Selection and select your channel from the list. You'll also need to hide the channel/mask by clicking on the eyeball in the Channels Palette.

Describing it like this makes it sound long winded but it's actually very easy and quick, plus you always have your selection saved. I'm sure it's described more accurately in the Help Files.