This is zap's ideea posted on beta forum , i just thought i would explain it a lil bit clearer for those who did not understood it.
This is only for those of you who have ko installed on a diferent hdd partition then the one in wich your operating system works , like i do.
So lets say you have 3 partitions labeled C,D,E.You have the old ko installed on lets say d:gamesknightonline , and the patch automatically tries to find it on your C partition , thus you get an error at the end of the "you dont have ko installed " type.Here's what you do:
First you open notepad ....start bottom left then click notepad.There you type the following / copy paste if you are lazy :

Windows Registry Editor Version 5.00

"CompanyName"="Copyright 2002 NoahSystem And MGame"
"SERVICE"="Knight OnLine"

The line that starts with path has to be modified according to the location where you have old ko installed
in my example it is on D:gamesknightonline thus the command is "PATH"="d:\games\KnightOnline"
After you wrote everything close the notepad it will ask you to save , press yes.
At the bottom you have a file name option with the name of the file *.txt
modify from *.txt to v1264.reg then press save . You now made a reg file.Doubleclick the file you made , wich you should find in your documents , under the name v1264 , and press yes when it will ask to add it to registry.
Now you can install the patch on the desired path.