OK, the first thing you do when Windoze or Windoze programs don\'t work properly is: reboot and see if the problems go away. This sadly still applies for WXP. Microsoft just is incapable of producing decent software.
If rebooting doesn\'t solve the issue, it\'s most likely the program.
You are not, by any chance, running W9x or WME? If yes, look for the file \"updater.zip\" in either the PS folder or in the \"updatertemp\" folder. Unzip this to the main PS folder and run the updater. Copying the files from \"updatertmp\" will only work with some versions of the updater, as some back-up the old files to that folder, and some unpack \"updater.zip\" there, so you might just be copying the old files back onto themselves. The safe way is unzipping \"updater.zip\".
Edit: there is a patched updater:
http://planeshift.zarevak.net/updater.zipDownload and unzip into your main PS folder, but back up \"updater.exe\" before doing so, in case it doesn\'t work!
BEWARE! This is made available not by me nor by the PS team, so the integrity of this file isn\'t warranted by any means (it was OK by the time I used it, but this may very well have changed, so scan the file for malware before using it!).
Also, it was created to solve a different problem, and some time ago, so it might not work anymore.
You can try this, as it might be that your version of the updater is buggy. Note that with this version, you may run into similar problems in W9X or WME, so be sure to read this thread:
http://www.planeshift3d.com/wbboard/thread.php?threadid=12936&boardid=33&styleid=3Another edit:
If you manage to successfully update the updater, you may run into another problem, which is solved by running the updater in auto mode, as described here:
http://www.planeshift3d.com/wbboard/board.php?boardid=33