Game keeps redownloading itself

So I bought the game through steam, downloaded it, installed it, played it, shut it down, played again, etc... No problems. But I get tired of steam running in the background, friends annoying me while playing and other sources of decreased performance.

I decided to uninstall and download the stand-alone installer via my game account. It downloads the whopping 3.6 gigs again, and installs. I click "I Agree" and start playing, no problems. I shut down, I want to play again... And it asks me where I want to install the game again.

Needless to say every time I've tried restarting the game since then it keeps prompting me to install again. I've tried redownloading and reinstalling again but with similar results.

I searched around the forums a bit but found very little people with this problem. Some suggested it might be Steam's fault but it's actually the other way around here. Some also suggested adding "-project coh" to a shortcut's extension to bypass the updater, but I get a similar problem then someone else was having of being unable to log in. Most likely due to me being European.

So yeah, do I really have to redownload this game on Steam again just to be able to play or has a fix for this been found by now? Please advise.

Having to download 3.6 gigabites 4 times in a row isn't exactly good for my internet since I'll be put on dial up if this keeps up. And it's only the beginning of the month.

Technical info:

HP Compaq 8510w Laptop
Windows Vista 32-bit
ATI Mobility Radeon HD 2600
Installed in C:\Program Files\City of Heroes

What is the value of HKEY_CURRENT_USER\Software\Cryptic\Coh\ "Installation Directory"?

Aha, it was set to something wacky it seems: "C:\Program Files\City of Heroes\City of Heroes\City of Heroes\..."

I've fixed it and the updater is now functioning properly, however I'm now still getting the "incorrect password" problem. Do I have to add a command to my updater shortcut in order to make me connect to European servers or something?

Other than that, I can at least update the game and play it properly now.
A humongous thanks to you, good Sir!

Never mind, looked around a bit and got a hold of the European update.exe

Everything works perfectly now! My deepest thanks, Lisar, for putting me on the right course!

This issue is now solved.

Oh...you're welcome.

I don't normally get these right.

I am left wondering how many versions of the game you have in nested directories...