Because when Handspring built the Treo they created their own 5 Way Rocker API rather than using the Palm 5 Way Navigator: The two are not compatible.
I looked at Treo compatability when writing version 2.0, but the Handspring API does not support as many features as the Palm one; it does not notify an application when the rocker is released (only when its pressed) and there is no way for an application to find out whether a particular direction is being held down. That means I can't get the 5 Nav Launcher concept to work. Sorry.
I have heard rumour that Palm is going to update the Handspring API and add the features I need, so maybe a future version of 5NL will be able to support the Treo.
This was to avoid a problem that single button launcher (and no doubt other launchers too) suffers from - there is no way for an application to find out the history of button presses, so if the user only taps the hard key the launcher cannot tell which hard key it was started from and has to guess. My way is a little harder to set up but will get the correct key every time.
Because it takes the file size from 1kb to 5kb and i value your precious storage space.
Have a read through the rules page to understand how 5NL chooses which version to run. Probable causes are you selected a version of the application with a different name, or have replaced a built in application with a newer version on external card.