During VLC upgrades, all web browsers and VLC processes (even zombies) must be halted, otherwise you are prone to overwrite file errors. Depending on your system and account privileges, you will be requested a privilege elevation used to access either program files of the registry.
"By hand" sands for using
http://www.videolan.org/vlc/ to upgrade from 1.0.0 I think.
You can retry 1.0.1 install ensuring %PROGRAMFILES%/VideoLAN/VLC is clean after 1.0.0 uninstall.