I had the same issuses myself with Conduit 2 with online play as this too was asking for updates! This is what i learned myself, having a softmod wii should not ruin your game play what so ever. The update that the game is asking for will not update your system menu, i believe the update is for a save file for the game. That's what i read so i went ahead with a lump in my throat and did the update for Conduit 2.
And all is well i can now play online.
Things to remember never never except an update from a disc in the normal wii menu and never update from the wii settings menu!!!
Having Priiloader installed and blocking disc and online updates is highly advised.
Hope this helps.