If it works using a different directory then upload the new phpBB files to a new directory called temp replace config.php with the working version from your phpBB directory then update the database delete the old phpBB directory and rename the temp one to phpBB.
does that make sense?
You will need to chmod your temp directory when done http://www.phpbb.com/kb/article/chmod-permissions/
If you have mods installed and would prefer to keep them, follow the guide here - viewtopic.php?f=50&t=2149&hilit=wamp
Instead of a new install of phpBB make a backup of your installation and use that, make a back up of your database and use bigdump - http://www.ozerov.de/bigdump.php
to import that, then run the updater.