Hey Martin,
Recompiling wyUpdate should work on Visual Studio 2005 because we only use .NET 2.0 syntax. Though, thruthfully, we haven't tested it on VS 2005 since we moved to VS 2008 then VS 2010. You can get Visual Studio 2010 Express here.
I think that I found out where the text is draw here - it is in the PanelDisplay -> DrawBranding method in wyUpdate project, isn't it?
Yes. After you make your new version of wyUpdate see the article "How to make a custom version of wyUpdate" to learn how to make your custom version of wyUpdate self-update properly.