The advice about downgrading to 1.03 looks horribly outdated to me. v2final is as good as it gets for database stuff.
The messages indicate a corrupt playlist file -- not sure though. The playlist files are stored with the tunes in the fids directory, and are never affected by database rebuilds on any version of player software.
So, before you waste too much time with an ancient release.. have you tried just deleting the existing database files by hand, and then letting it do a fresh database rebuild after that?
The files you need to nuke are:
/empeg/var/database
/empeg/var/database3
/empeg/var/tags
/empeg/var/playlists
You can blow those away from FTP or a serial connection.
Cheers