Okay, I just updated and got the same error.
Thanks to you both, because we have a 4e session on Sunday and I've send an emergency warning to the group not to update.
Luckily, I am paranoid enough to keep copies of older installs just in case so I was able to roll back to 8.4d for now.
I'll report it to Lone Wolf and cross my fingers that anybody cares. I encourage you to do the same at
support@wolflair.com so they know that they still have a 4e user base.
EDIT:
Here is a link to the Hero Lab 8.4d install.