When upgrading from xampp 1.7.3 to 1.7.4, it is necessary to backup and restore mysql data using mysqldump, then delete your data directory.
I recommend uninstalling, before upgrading. I'd move out your htdocs, so that you can remove and replace it with Xampp's new features, as well.
Note that Xampp does not prompt you, before deleting the conf folders. If you have virtual hosts, for example, be sure to back these up.
I recommend installing Xampp as an UNprivileged user, to make it easy to start & stop services. Ensure that c:\xampp\ has write privileges.
I sometimes use Revo Uninstaller, which likes to remove lang.tmp with its cleanup tool. Be sure to configure Revo to stop this.
While mysql+php work for me, phpmyadmin initially failed for v1.7.4. I think this has something to do with NTFS being case aware, but not case sensitive.
I renamed the phpMyAdmin folder in cygwin, then moved it back, and now it works. See phpmyadmin alias in httpd-xampp.conf for details.
Finally, Avira antivirus throws warnings about Xampp 1.7.4 (at bottom). I expect that these are spurious. I have not had a problem quarantining the affected file.
Beginning disinfection:
C:\xampp\mysql\mysql-test\t\ctype_utf32.test
[DETECTION] Contains recognition pattern of the HTML/Rce.Gen HTML script virus
[NOTE] The file was moved to the quarantine directory under the name '4b3b2ca0.qua'.
C:\download\xampp-win32-1.7.4-VC6-installer.exe
[DETECTION] Contains recognition pattern of the HTML/Rce.Gen HTML script virus
[NOTE] The file could not be copied to quarantine!
[NOTE] The file does not exist!