First of all, the "check for updates" thing in PMW is only for updating PMW, not the PonoPlayer device. The PonoPlayer device update is pretty much automatic.
Are you sure it didn't update to 1.0.5? Do you think you unplugged the PonoPlayer while it was transferring the update to the device? In that case, there could be a corrupt update file on your PonoPlayer. You can use Finder on Mac or Explorer on Windows to examine your PonoPlayer device. The internal storage will have a folder called ".pono" at the root. Inside that folder there will be a small file called "firmware.xml". Don't touch it. There may also be a (possibly corrupt) update file called something like "pono_1.0.5.update". You can safely delete this file. Now start up PMW and it will download a new copy of the update to your device (assuming the device is at an older rev. like 1.0.4).