Same here & possible workaround
A possible workaround: the "Update Spybot-S&D" entry in my Start menu is set to run as an administrator. It appears that if I open the updater directly from the Start menu, it seems to work correctly. (IE it presents its UI, does not present an error message, and lets me go through a normal update process. However, I need to wait a week and see if it will actually find updates).
Another possible workaround: In Settings > Settings > Web Update UNcheck "Search the web for new versions at each program start". (With this checked, the accursed dialog box shows up at startup, before the "Loading Spybot" progress bar completes, and the dialog also appears every time I click the "Update" or "Search for Updates" buttons. With this UNchecked, manually clicking either of those buttons causes the updater to successfully launch)
Some background:
I am experiencing this problem as well, on Vista Ultimate 32 bit, from an administrator account, with UAC enabled. I ran the installer as an administrator.
If I run Spybot as an administrator, I get the described behavior. If I do not run it as an administrator, clicking the "update" button appears to have no effect at all. I would be happy to provide more information if necessary.