Unfortunately, yes, you do. The Installer's version of the engine is quite outdated, the Installer's copy of the MediaVPs is corrupted, which WILL cause problems sooner or later, and I don't know whether the Installer has the new Launcher already.
And the Installation of those three pieces is quite simple. First, delete everything in <FreeSpace Directory>\mediavps. Extract the mediavps you downloaded into that directory.
The Launcher and the executable go into your FS directory.
As for "136 ways to be modded", no, there really is only one way. Other ways might work, but are unreliable. And there is usually always someone here or on IRC available to help you if you have problems.