I did Direct2Drive when I installed the game. When I try to update it says I don't have a version of Civ4 installed on my computer and cannot install the update.

:band: Welcome to CFC :band:
you cannot patch a d2d version from ingame. You have to go to the d2d website and download it from there (d2d needs special patch versions) - so just visit their site and you should be able to download it there.
Edit: I seem to remember that either steam or d2d autopatches their games so you might want to check in advanced -> about this build if you already have the newest version. In any case if in doubt just download the d2d patch.