I am not sure how to access the registry in wince. Let me know and I can check it tomorrow morning. Attached is PRG.FLG
BTW, it would be nice if there was a way to tell which version on CONDIHACK is currently installed. I am not sure if v1.1 installed or not... It just flashed the boot screen a couple of times, and then loaded wince.
I am not sure if PRG.FLG only shows up on Pioneer updated unit or not. My understanding on Shortfuse's upgrade hack is that he increments the version number so the unit 'thinks' it's a new update so it will install. then his DLL bypasses the authentication.
Hmm... your PRG.FLG looks for me empty
maybe its just dummy file like our hackmode.key 
In attachment there is some app with script I made to make full backup of registry 
Just run BackupRegistry.exe via file explorer, and wait some minute to get data - fullbackup.reg.
br
condi
PS. Update works the way you described
after the update you have new file manager instead of the old-blueone,
and 'CONDIUPDATE' directory will be deleted. I will think how to give some info about current version.
---edit:
I've attached the files from my dump
In your unpacked dump of wince, there are three files with registry:
boot.hv, user.hv, default.hv.
Now just edit it, repack it, write it to device and... brick? or success?
:D 
Registry editor with HV support: http://www.ceregeditor.mdsoft.pl/files/CeRegEdit_Setup_0.0.5.2.exe
---edit:
RegistryBackup tool fixed!
Just unpack directory to SD/USB to root like:
'\SDMMC\RegistryBackup\BackupRegistry.exe' or
'\USB\RegistryBackup\BackupRegistry.exe'
and run it 
RegistryBackup_ok.zip