Hello Proteous,
not sure if this will apply to your problem, but here is something else you could check:
* Is there an "updatertemp" directory inside your main Planeshift directory?
(that would be strange, as you did a full deinstallation/reinstallation...)
* If "updatertemp" exists, are you able to write files into it?
* If "updatertemp" does not exist, are you able to create it manually and then write into it?
As far as I can tell by reading the source code, the updater creates this "updatertemp" directory, then downloads into it a file containing the current Planeshift version number. If, for some reason, this file can't be written then the version check fails (i.e. "Updater::CheckRegistryVersion()" returns false) and the updater displays the famous "version.dat" message (quite misleading in this case!). At the end of the update, "updatertemp" is deleted.
One possible reason for such a "write" problem would be: if your Windows XP is a "Pro" version and you're connected with a non-privileged user.
Note: I made the supposition that you were using the "Start menu" shortcuts to launch the updater. If you are using another method (your own scripts or a manual launch in a console) then check that the "current directory" is equal to the Planeshift directory (the version check fails too if these directories are different).
I hope that this could be of any help...