For one reason or another, upgrading Growl to v1.3 causes all sorts of mayhem. Growl v1.3 is a new, paid application that’s different software from the previous preference pane. The only instruction I saw when I upgraded was to run the uninstaller for the preference pane. After a bit of trial and error, I discovered there’s a couple more steps you’ll most likely need to do to get things working properly again.
First, download and open Growl Version Detective. You’ll see something like this:
Select each application Growl supports and upgrade the framework version to 1.3. Notifications should start working again.
Second, if you use Skype, you need to tell Skype to use Growl instead of its internal notifications system:
The second step finally quells unstoppable notifications of contacts signing in and out of Skype.