the update function does not work. you will need to go to your product registrations page and download the full installer. You should uninstall the old version prior to running the new one though.
Now...
I created a virtual server 2003 system (fortunately I had a 2003R2 SP2 template made), joined it to the domain and installed fences.
BGInfo and Fences co-exist just fine. Don't know what to tell you at this point...