Hi,
Yes, it's some sort of quirk of Microsoft's MSI installer (which is what we use these days). Sometimes, for reasons we don't understand, it fails to install the LAME encoder (which has changed recently), so you are left with the old one. VinylStudio checks for that and displays this message if it happens.
Anyway, uninstalling and reinstalling is perfectly safe. You won't lose any settings or data - we never touch those.