I don't know what mod that is. But I think I probably confused things by mentioning a couple different possibilities. I was suggesting two possible approaches (of whihc you'd want to choose only one): 1) change the useractivation table in the same place you're currently setting the user title, in which case you don't need a plugin to do anything when the actual activation happens because it wil use the usergroup from the useractivation table. Or 2) use a plugin at hook register_active_process and check the user title field and set the usergroupid in the user table, like the mod I linked to above. The code for that would be something like:
Code:
if(!$vbulletin->options['verifyemail'] AND $user['usertitle'] == 'Deactivated')
{
$newusergroupid = 4;
$vbulletin->db->query_write("UPDATE " . TABLE_PREFIX . "user
SET usergroupid = '".$newusergroupid."'
WHERE userid = '".$user['userid']);
}