The registration status is stored in the savegame file. Developers usually try to preserve compatibility between versions of their applications, but a major rewrite of some parts of Village Sim was needed to correct some of the bugs in v1.0. Therefore, since v1.0 and v1.1 savegame files are incompatible, the first thing that Village Sim v1.1 does is delete any v1.0 savegame file that it finds. That's why you need to enter your registration code again after you install the v1.1 update.