Which version of Heavensward do I need? (Vanilla Account) Launched through Steam.

[worldofneil]

The game is launched and installed through steam, but the account I play on is my old 1.0 Vanilla account.

You need the non-Steam expansion. It doesn't matter how you launch the games, all that matters is the account you want to upgrade and where you originally purchased that. You didn't purchase that account through Steam so you don't upgrade through Steam.

I actually have a friend with the same issue.

Where did they purchase the account they actually play with (the one with their characters on). The serial code they used determines if it is Steam or not.