I used Impulse to update and have no problems with the lastest version of Icon Packager. I'm run XP Home 32 bit SP3.
What methold did you use to update? Are you running any other package that deals with or changes the Icons?
I would suggest that you uninstall IP4, (set icons to default first) run a clean up program like CCleaner, and a registry cleal up then reboot. Use Impulse to reinstall. I don't believe IP4 requires a reboot again but do it anyways.
Hopefully that clears up the problem. Post back and let us know. If it doesn't then I would recommend an email to support@stardock.com.