I had multiple issues with the "vanilla" install of 1.1 of this game. Having just purchased as a digital download (Slitherine), I was a little surprised that it wasn't the most recent version but an unpatched original. Had it been an up-to-date version it would have saved me some 4 or 5 hours of redownloading, uninstalling, reinstalling, testing, etc.
In any case, here's what I had to do: The update through the native menu would not work (serve file error every time), so I had to download the standalone version from Matrix. After installing, there was no Vertex/Pixel Shader 2.0 launch option. I knew from other forum posts that it was in the update, so I installed the update to its own folder separate from the original CoH install location. I could see that this then had the appropriate launch options, so I just copied everything in this folder over to the original install location, overwriting anything that already existed.
Finally, I had to edit the launch shortcut. For some reason, it had a "start in" value that was probably derived from the developer's machine rather than my own: "C:\Users\Eric\Documents\Visual Studio 2008\Projects\HexGame\HexGame\bin\x86\Release" I assume this is the case because I am not Eric, and I don't have a VS 2008 on my machine.
So, in case anyone else has update issues, here is a possible work around. After all of this, it works quite nicely and seems a Great Game.
One last question for the devs though, out of curiosity: Why "HexGame" ? I mean, aside form the obvious in that the game has hexes in it.