I'm reposting this from here, you can go there to see the images if you need to, but it's ultimately not necessary.
[SOLUTION] - found here. Episode 1 does apparently load from the new version, I just have no idea whether I can delete the old one and still have it - I'll find out eventually.
I received notification that Episode 2 came out, and I waited. I thought it would be smart to allow the rush to subside before taxing the servers with my desire to survive zombies.
See the attached screenshot for what my episode 1 "The Walking Dead" told me - download an update version from Telltalle.
After launching the new version - which did not replace the old one, being named "TheWalkingDead" rather than "The Walking Dead," I downloaded Epsiode 2. Really. I. Had. To. Leave. The. Application. Open. While. It. Downloaded. Episode. 2.
I then launched Episode 2.(see second screenshot)
It wants to "randomize" events for "unplayed" episodes. No save files.
Really, Telltale? How did it become this screwed up?
Again, the "open the hood and fix it yourself- quite easily" solution is here. Thank you, Nonz!