No, using 1.0 RC4 with 3.5 won't work.
No, you don't have to pay again. With your purchase comes a year of free upgrades. To grab the latest version just go into the Members Area (the link off of the main page) and grab a fresh copy of the vBa Gallery package. In the readme file near the bottom are upgrade instructions.
Oh, when you go to download the package... be sure to select the vB 3.5 version from the drop-down menu.