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Originally Posted by peskycritter
Actually Steam has a separate client which I need to update separately (I have both installed on my pc). Oddly enough both clients seem to use the subfolder of the documents folder for storing user-specific data though. I've got the problem that the Steam client doesn't recognize my installed plugins anymore.
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What I meant with identical is that the software is identical, in your case it is just installed as two identical copies in different directories. I cannot think of any reasons to have the game installed multiple times though; the game as installed by Steam is identical to the one installed regularly, and LOTRO has the capability to run multiple times at once out of the box without needing to install it multiple times as well. You just have the hassle of having to update twice because of your install.
Now because they are the same, they access the same settings in the Documents subdirectory, that is not odd, that is by design.
Have you tried the steps as described above by Thurallor?