There are two separate 'issues' at work here folks.
Firstly, when you use the in-game editor to change a single thing about the players in the game - whether that be a transfer, adding an accessory, changing a single attribute, creating a player, anything at all - the game saves ALL of the player related data to the 'D. My Squads' data file. This is why you need to delete that file, or reset it from within the game, in order to see any changes to FIFA.DB data.
Secondly, the patch is a genuine 'patch' rather than what the community generally calls a patch. A patch of this sort expects the files it is updating to match those supplied with the game and then applies changes to those files rather than simply replacing them with potentially disastrous consequences (which is what the community patches tend to do). Therefore if you have edited your FIFA data in any way, using external programs like DB Master, FIFAData or UniDB, then the patch will fail to apply the updates to those changed files (which is one of the reasons for the 'old file found' error). If you are running a cracked version of the game, even if it is 'just' a no-CD/DVD crack, then that version of the .EXE will differ from the original and the patch will fail to update the .EXE as part of the process.
Of course all this is complicated by the plethora of localised versions of the game, which may or may not have been sold into the 'wrong' territories, so you also have to get the version of the patch that matches your version, which isn't going to be an easy task.
So, the moral of the tale is don't try and apply this patch to a customised version of the game, and delete your squads file if you would like to see the updated player data.