Deleting old config files can often solve many problems, and should be attempted as a first step.

Note: You should substitute 11 with the version number of LightWave you are using.
On 32bit machines the files will not have -64 in the filenames.

Config files location on Windows machines:
C:\Users\USERNAME\.NewTek\LightWave\11.0

Delete the files named:

LW11-64.CFG
LWM11-64.CFG
LWEXT11-64.CFG
Extension Cache-64
LWHUB11-64.CFG

Config files location on Macintosh machines:
USERNAME/Library/Application Support/NewTek/LightWave/11.0

Delete all the files, but not folders.

No.  All current LightWave upgrades are full stand-alone installers.  Meaning that you don't have to have a prior version installed to install the next version.

This even holds true for 'jumping versions' - you don't have to have LightWave 9 to install 10, or 10 to install 11.

Just install the version you want to use.

First try updating your dongle drivers.

Dongle Drivers :
http://www.safenet-inc.com/support-downloads/sentinel-drivers/

Bear in mind, that the Macintosh installers contain the proper dongle drivers.  If you're having this issue on a Mac, you might try moving the dongle from port to port.  If it still doesn't work - you might have to get a dongle replacement.  Contact cs@newtek.com for that.

I will point out here that LightWave 11.0.3 and higher doesn't require the dongle any more.