It's a windows controlfreak issue with file permissions. Since I'm on windows XP(and now unable to play the game with no fix available at all, tyvm devs), I don't know the specifics. But your question was answered mixed in this thread somewhere along with the winXP problem:
http://boards.cityofheroes.com/showthread.php?t=257008
10 50's To Date! Check out Titan Sentinel; it got my CoH presence synced online
Tried the stuff in there for security including trying to run as admin and user. Both botched with the same lame message. Old updater worked, so i'll stick with that till they... NCsoft THEMSELVES... FIX the new updater. As I'm a monthly subcriber only I can ditch with little burn any time... if I can't play when the old updater is dumped officialy for this turd sandwich withought me having to be a computer expert to force functionality out of it then.... it's been a fun 7 years. Cheerio all!
Blast them though. They did get me for all but two " booster " packs.... Oh cept the mac one just today while I thought ieverything was tickety boo on that first ill fated updater run... So all but one booster. (shakes fist) "Fix it Dev's! What am I "partly/fractionally" payin' yer paychecks for?" hehe
Thanks though for your efforts Psychic Guardian... 
and the rest of the regular fellow gamer folks in that thread you mentioned, and the no doubt multiple other threads this ill considered issue will create. I hope it solves some problems for others.
:EDITED 8:45 PST
After everything tried it now says.
----------------------------------------------------------------
Error Code: 58 (FileGroupApplicationErrorRollbackNotAttempted):
Errors occurred while applying the patch,
and a rollback was not attempted.
The product is likely in an inconsistent state and should be repaired or reinstalled.
The patch application errors are as follows:
Access is denied. (Exception from HRESULT: 0x80070005 (E_ACCESSDENIED))
------------------------------------------------------------------------------
It's all Crazytalk to me. I should not have to leap through hoops to play this. (shrug)
NC Soft.... "FIX IT!"
Maybe it'll work fine tomorrow? (shrug)
FIX IT! ;p
Oh and yes... new computer fresh outa the box last week. Win 7 came with it.
FIX IT!!
Note: I am grinning as I type this. I'm not vengfully Kill the Dev's angry... Just bemused, slightly miffed... Something? Yah that's it.
NOTE FINAL 10:05 PST:
Phew. Well I didn't give up. Went through the steps suggested again and made sure to rightclick open the New NC soft updater and Hit "Run as Administrator."
I don't know if I just finaly got the stuff right or they got a hotfix going (if so Good show Dev's... I take most everything I said earlier back. hehe I was only blowing time and spouting off anyway. That had to be evident.)
Anyway... Updater started updating and seemed faster doing it. It just felt different. Low and behold after about 4 minutes she was done and loading game.
I suppose this is something they will investigate and I wish them luck. Especially for the Win XP users. 2 weeks ago... that would been me. Outta luck and hope unless they make an option for the older systems that can't/wont upgrade that SP3 or whatever thing.
Well Goodnight Forum friends... Off to play hour... then bed... then work. ;p No rest for the wicked.
Access to the path 'C:\Program Files (x86)\NCsoft\City of Heroes\cityofheroes.exe' is denied.
The above error shows up when I try to update the game.
Anyone else getting this?
Anyone know how to fix it ?
Should I just uninstall and start all over?
Thanks for any and all help.
*** Note: I'm not terribly computer savy... Layman's terms if you can please.