DO NOT UPDATE to the new minecraft or you will not be able to play this server. follow the following instructions to downgrade back to 1.2
If you are getting:
Outdated Server Error
That means you are using the wrong client version.
Why?
As I can only update the server to new versions of MC when all/most of our Mods can be updated, we tend to have phases now and then where we are running an older version of MC. As Notch obfuscates all his coding, this can take days, depending on the update and the availability of devs to port the Mods.
Download MC 1.2
If you were clever, you would not have auto-updated your client. Luckily, there is a simple solution.
The MC client that currently works on the server is the same client you have been using until the latest MC update, you can download it once again here, or use your own archived version.
Download link: [You must be registered and logged in to see this link.]
Install
On Windows:
1) Hit the Start button.
2) Write %AppData%\.minecraft\bin in the white search box, this takes you to the MC folder.
3) There you will see a file named minecraft.jar and a file named "version".
4) Overwrite the minecraft.jar there with the version you've just downloaded from the link above.
Done! You can now run Minecraft as normal, do not double-click the .jar there, that is not the way to start MC, just use the shortcut you had, on your desktop for example.
To let your client auto-update again simply delete the "version" file as shown above, then start MC.
From Orcworms Post