I had the same 'RGL ERROR' bug after upgrading from 0.632 to 0.704. Deleting and installing straight to 0.704 worked (don't know if patching a newly-installed older version would've worked).
Interestingly enough, after the uninstall, I had to log off and back on before deleting the old Mount&Blade folder, because something still claimed to have it in use. No idea what.