@spiro774
You can get two kind of errors with your settings file:
-"Can't connect, check your settings.txt"
-"Settings not found or invalid"
With the first error you username/password is wrong or the mainserver/server settings.
With the second error you use a settings.txt file from a previous version that isn't compatible any more.
I'm sure when you check you username/password and server again it will work.
Also I would recommend to upgrade your .Net Framework to 3.5 you can find the link in the startpost.
@Beastygirl
The space isn't the problem here

. For some strange reason the forum adds random spaces when you copy/paste your text here. Happens almost every time when someone posts his settings.
~Uthar