See that is the thing I've been wondering. In the readme for the K1R Restoration Mod it says, "if you're running the english version, drop this dialog.tlk file (the one that comes with the mod) into the game directory." What the readme failed to explain, is that there already is a dialog.tlk file in the game directory. Should you replace the dialog.tlk file that is already there? Or keep both files in the game directory? And is it the dialog.tlk file that comes with the mod, that the patcher is looking for?
Furthermore, I can confirm the Installer.exe file is pointed at the game directory and not the Override folder. swkotor.exe is in that same folder but for some reason, you can't see it. Unless you peruse through that folder outside of the window that is popped up by the Installer. The game directory as seen from the installer only shows a list of folders. Funny story, I was getting frustrated that the Installer wouldn't recognize my game directory, so for the heck of it, I decided to see if it would recognize my Override folder, which it did. But it dumped everything in the Override, which isn't where it's all supposed to go anyway. But at least that worked!