Option with auto-update of config.php works only when the your user has enough rights to overwrite needed files.
In your case Stan, possible reasons are:
1. missing/empty/corrupted ow_install/files/config.txt file.
2. issues with file_get_contents function on your server.
Have you tried replacing content of config.php manually using standard template?
<?php
define('OW_URL_HOME', 'URLHERE/');
define('OW_DB_HOST', 'dbhosthere');
define('OW_DB_PORT', null);
define('OW_DB_USER', 'userhere');
define('OW_DB_PASSWORD', 'passwordhere');
define('OW_DB_NAME', 'dbnamehere');
define('OW_DB_PREFIX', 'ow_');
define('OW_DIR_USERFILES', OW_DIR_ROOT.'ow_userfiles'.DS);
define('OW_DIR_STATIC', OW_DIR_ROOT.'ow_static'.DS);
define('OW_URL_STATIC', OW_URL_HOME.'ow_static/');
define('OW_URL_USERFILES', OW_URL_HOME.'ow_userfiles/');
define('OW_DIR_PLUGINFILES', OW_DIR_ROOT.'ow_pluginfiles/');
define('OW_PASSWORD_SALT', '518a0b12e3cd5');
define('OW_DIR_CORE', OW_DIR_ROOT.'ow_core'.DS);
define('OW_DIR_INC', OW_DIR_ROOT.'ow_includes'.DS);
define('OW_DIR_LIB', OW_DIR_ROOT.'ow_libraries'.DS);
define('OW_DIR_UTIL', OW_DIR_ROOT.'ow_utilities'.DS);
define('OW_DIR_PLUGIN', OW_DIR_ROOT.'ow_plugins'.DS);
define('OW_DIR_THEME', OW_DIR_ROOT.'ow_themes'.DS);
define('OW_DIR_SYSTEM_PLUGIN', OW_DIR_ROOT.'ow_system_plugins'.DS);
define('OW_DIR_SMARTY', OW_DIR_ROOT.'ow_smarty'.DS);
define('OW_USE_CLOUDFILES', false);
if ( defined('OW_CRON') )
{
define('OW_DEBUG_MODE', false);
define('OW_DEV_MODE', false);
define('OW_PROFILER_ENABLE', false);
}
else
{
/**
* Make changes in this block if you want to enable DEV mode and DEBUG mode
*/
define('OW_DEBUG_MODE', false);
define('OW_DEV_MODE', false);
define('OW_PROFILER_ENABLE', false);
}