Hey my account still works!
Just to add to this thread, I was having the same crashing problem. Just upgraded my machine to a shiny new Core i7-2600k and Z68X MB (no I did NOT make this post just to brag...much).
I wanted to start MWLL to see how much it had improved performance, and bang, instantly got the error.
Oh no I thought.
Checked out the situation, everything LOOKED okay as far as I could see. But I went and downloaded the latest auto-update, same problem. Had a look through this thread and decided to check the logfile for its errors...
And of all the things, the entire Crysis Wars folder under My Games had been made hidden (I had the weirdest virus a while ago that almost randomly went through and made files hidden, took me a long time to clean it off and its legacy has been most annoying).
I 'un-hid' the folder, bang, its working fine now.
So you might want to always double check that the file system of folders under My Games are intact and visible, as that clearly crashes the updater (or the devs may want to flag a warning or something in the next build that alerts the user to this fact??)
Just throwing this out there in case anyone else runs into it. Now I'm off to see how far I can push my OCed 5870 against Clanner Scum. "Initiate enhanced imaging!!"