SOURCE: Upgrade for settlers downloads but won't run
I had this issue as well. Download the patch directly from the website, and run it locally. Afterwards the updater won't find a newer patch, and goes directly to the game. I don't know whether this will break again once a new patch is released, but you should be able to manually install it again at that time. Patches can be found at http://www.ubi.com/US/default.aspx under support --> patches.
This link may take you directly to the right place.
http://www.ubi.com/US/Games/Info.aspx?pId=5923&tab=download&dcId=63
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