Locate your copy of Google Earth, Control-click on the application and choose Show Package Contents from the pop-up menu. Now remove the following two files, based on starting at the top of the application bundle:
Contents/Frameworks/KeystoneRegistration.framework/Resources/install.py
Contents/Frameworks/KeystoneRegistration.framework/Resources/Keystone.tbz
The first file is the python script used to install the updater service, while the second is a tar-bzip'd bundle that contains the updater service. If the source files aren't there, Google Earth will be incapable of installing the updater service, no matter what you tell/told it on first run.

Remove the updater application and files installed by Google Earth

If you've already been running Google Earth 5, you may also wish to do the following after completing the first part of the hint. Remove the following folders/files:
~/Library/Google/GoogleSoftwareUpdate
~/Library/LaunchAgents/com.google.keystone.daemon.plist
~/Library/Caches/com.Google.Keystone.*
~/Library/Logs/GoogleSoftwareUpdateAgent.log
The first being the Google update service, the second the launchd plist that specifies when to run the service, third any items already downloaded by the google update service, and fourth the log file from the update service.