Thanks everyone for the suggestions, here's what happened, it might be helpful to know for those in the same situation:
Basically since I made a clean install I got myself an older SDL library. It would seem normal that if your are installing Update1 ->Update2 and then Update 3 you get all the latest files but not so with SDL.
To anyone that performed a clean install: remember to download the latest SDL here ->
http://code.google.com/p/os4sdl/P.S
the latest LodePaint with Amiga look, looks very cool :)