Okay. So I did some searching around and found another thread on this POL-1158 Error. I don't know why, but the Steam version is the issue. Luckily I had a CD version from some time ago and I went ahead and installed that. Did all my PlayOnline updates and logged in(didn't get that Friend list communication error). Went to do updates for Final Fantasy XI (with fingers crossed) and was glad to see that my 9 hours of updates started with no error messages. I sincerely hope either you can figure a way to get the Steam version to work for you or that you can get a CD version to install.

Edit: Went ahead and found the link to that other thread which happens to be on the Steam Users' Forum: http://forums.steampowered.com/forum....php?t=1377423