I experienced the same problem but after some work I found a relatively easy solution!
http://sots.rorschach.net/Steam#Steam_Invalid_CD_Key_WorkaroundIf you use the link, please note that the webpage actually is an answer to someone who had problems with another game so where it says "Sword of the stars", replace it with "Mount&Blade Warband" as I have in the spoiler below.
So basicly, as I understand it, the problem is that steam has the wrong CD-key connected to your Warband.. I think I got this problem from logging into a friends steamaccount and playing warband. I did manage to switch back and forth several times but suddenly it didn't work anymore.
Warning! This solution probably only works if you know your real Warband CD-key! Otherwise you'll probably have to reinstall steam and all instead. I got my key from a friend who logged into my account from his computer (which I had played from before, not sure if that's necessary though).
I've posted the solution in the spoiler below, the solution
clears the CD-key from your Warband and should replace it with the one you type in, however, I had to enter the CD-key once I had started Warband, no biggie though!
To create a file that will update your Registry with the correct information to prevent typing errors:
1. Right click on your desktop -> New -> Text Document
2. For 32 bit Windows copy this text, putting your CD Key between the quotes
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SOFTWARE\Sword of the Stars]
"CDKey"="your-serial-key-here"
OR For 64 bit Windows copy this text, putting your CD Key between the quotes.
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Mount&Blade Warband]
"CDKey"="your-serial-key-here"
3. Click File -> Save As
4. Change the Save as type to All Files (*.*). This selection is right below the File Name box.
5. For the File name put steamsots.reg
6. Double click on the file you made. It will ask you if you want add this information to the registry, click yes.
7. Restart Steam
