I've run into the strangest issue.

For some reason, I can't change the key bindings. When I go into the menu and select the key to bind, the 'press a button for whatever' popup shows up, but it doesn't do anything. I can't close it and I can't set the button to anything; it just sits there no matter what I press, be it on the keyboard, gamepad, or mouse. The only way to close it is to forcibly close the game through the task manager.
I can press keys while actually playing the game, but not in the key binding menu; it kind of puts a damper on trying to set up my gamepad.

It worked before, but now it just refuses to. What could possibly have happened?

When you get to this screen there should be an option (Back) in the bottom left corner to exit out. If the game freezes however you may have run into some sort of weird file corruption with the game. Have you tried uninstalling and reinstalling the game? If not I would do so. If you need to back up your save files you can find them at C:\Users\Username\Documents\Prince of Persia\Save, however I would try the game with just a fresh install.

Also I would compare your system specs with the minimum requirements included on the back of the game box. even though the game worked previously I have seen situations where the game would start off working fine and then malfunction at certain points. I included the minimum system requirements below.


Prince of Persia (2008) System Requirements

Supported OS: Windows Vista / Windows XP (only)
Processor: Dual core 2.6 GHz Pentium D or AMD Athlon 64 X2 3800+ (Intel Core 2 Duo 2.2 GHz or AMD Athlon 64 X2 4400+ or better recommended)
RAM: 1 GB Windows XP / 2 GB Windows Vista
Video Card: 256 MB DirectX 10.0/9.0c-compliant, Shader Model 3.0-enabled video card (see supported list*)
Sound Card: DirectX 10.0/9.0c-compliant sound card (5.1 sound card recommended)
DirectX Version: DirectX 9.0c or 10.0 (included on disc)
DVD-ROM: Dual-layer DVD-ROM drive
Hard Drive Space: 9 GB
Peripherals Supported: Windows-compliant keyboard and mouse (Xbox 360 Controller for Windows recommended)
Multiplayer: None

*Supported Video Cards at Time of Release
ATI RADEON X1600** / 1650** - 1950 / HD 2000 - 4000 series
NVIDIA GeForce 6800** / 7 / 8 / 9 / GTX 260-280 series
(** PCI Express only supported)
Laptop versions of these cards may work but are NOT supported.
These chipsets are the only ones that will run this game.

NOTICE: This game contains technology intended to prevent copying that may conflict with some disc and virtual drives.

My system more than meets the specs and the game didn't freeze. The background and music were running fine, it just stopped accepting input.

Anyway, I solved the problem by uninstalling my old gamepad drivers.