Do you have se4 classic installed as well? If you have , the patcher is probably finding that exe and identifying it as an older Version. During the install, slect browse and make absolutely sure you have your 1.78 directory selcted.
I got the same error while attempting to update from SE4 Gold v1.60. Only solution was to reinstall from CD and then patch. That shouldn't be necessary -- patch should have worked the first time. No other copies of the game were on my system.