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The update partition for Animal Crossing: City Folk (RUUE) contains IOS38, which may be required for the game's Wii Speak feature. But City Folk also contains an update partition with System Menu 3.3 and a "fixed" IOS30 and IOS31, which prevents any "trucha"-signed discs from running, including the Homebrew Channel installer ISO versions. City Folk does not contain the October 23rd update, which fixes the signing bug in every IOS, but it's likely to be on future discs.
The Disc Channel will not let you start Animal Crossing: City Folk until you've installed all updates from the partition. Here's how to install the new IOS so that Animal Crossing: City Folk will work:
Gecko 1.8 or later automates all steps of this process and is recommended over it.
- Get WUFE and WadImport and put them on your SD card.
- Use Wii Update File Extractor to dump the update partition to an SD card with 200 MB free.
- Create a folder at the root of your SD card called wad
- Move IOS38-64-v###.wad from the root into the wad folder. The rest of the wads are no longer needed.
- Use WadImport to install IOS38 to your Wii console.
- At this point, you may be able to load the game disc through the Disc Channel. If it still displays "Wii System Update", use Gecko OS to start it.
Based on an explanation provided by Muzer in #wiihelp