I have the same problem here. Planeshift (or maybe CS) is not running in my normal account on an XP SP2 machine.
After creating a new dummy-user all runs smooth. By the way, its not a question of access rights. It works fine for ANY other user.
All CS applications coming with the planeshift binaries fail to start. The updater runs in console-mode (is this standard now?)
I ran FMon while starting pssetup in both user environments and could not find any larger differences - except of the point,
that pssetup reads old CrystalSpace directories in my user folder - but deleting them does not help (and also the tree was
parsed but no file was read). It looks more like a CS problem to me, but I don't have any clue at the moment.
Is there a way to get better debugging output

Previous versions wrote a lot to the console.