Welcome.
The launcher should display text it downloaded from a central server – if I remember correctly, the same this forum runs on. If it doesn't, it might be blocked from accessing the internet. Do you have any software installed which may cause that (personal firewall, security suite)? Even Windows' own firewall might invoke that, so you may try to add an exception for the applications "pslaunch.exe" and "psclient.exe", even though I doubt it is required usually.
It is possible to launch the game client even if the launcher can't access the internet; but it is a first indicator that something went wrong with your configuration. Of course, if the launcher is not even able to download the welcome text, it is neither able to download repair packages.
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Of couse you can install PlaneShift elsewhere. The installer suggests the directory which would be typical for your operating system, but you can change the location as you like. The game itself can be located anywhere; a few small personal settings are stored in the "Application Data" area of your user account, and OpenAL audio drivers are not big either in the Windows system directory.
Especially under Vista and Windows 7 with active UAC, it is even recommendable to install PlaneShift not in your "Program Files" default folder, to allow any user to run updates without starting the launcher "As Administrator".
