Do you think people hold all the official versions of a game as equally 'canon', or is the source game (which is usually Japanese, right?) seen as 'different' or more valid somehow?
Is the English version seen as more valid by players?
I think these questions belong together. It probably depends on what games you're talking about; I have the feeling that games that were originally animes are more often compared to the Japanese version than others - the reason for this might be that it's a lot more common to watch the Japanese dub with subtitles in the anime scene. But with "normal" JRPGs I'm fairly sure that most German gamers see the English version as canon and simply ignore the Japanese one because they don't understand it. For more possible reasons see below.
You said that some judge the German on its differences from the English version, does this happen a lot with German players? Why do you think it may be?
Almost no one in Germany speaks Japanese, but almost everyone understands (to a varying degree of course) English. Often, it's seen as some kind of superpower to be able to understand Japanese. That's maybe why the people are often oblivious to the fact that today a lot of games are actually translated from Japanese and not indirectly from the English version (as was usually the case in the SNES-era). And now, if they see there's a difference between the English and German version, they thusly automatically think it's the German version that's "wrong", despite usually none of them being wrong, just different (see the example with the translated dialect. I've read quite some threads about that "dialect problem", but no one even considered the idea that it was there in the Japanese version). It's also a lot easier to acquire an English version (e.g. by getting it from the UK - but even importing from the US is easier than from Japan).
It's even worse when you have an English dub with German subtitles (e.g. Final Fantasy X) because then the differences are very obvious.
How has any of this changed the way you or others translate games?
I usually ignore those people because if they're that attached to the English version, they should play that one instead of the German one. But if you look into the German ROM translation scene you'll see that probably 99% of the games are translated from English, not Japanese.
A few months ago, I showed off a few screenshots of the in-progress Far East of Eden Zero translation to fellow German ROM hackers, both in English (Tom's translation) and German (my rendition). The first reaction was along the lines of "But that's not what it says in the English screenshot" ;) I went on to explain that actually I was closer to the original, but both translations were perfectly valid.
Does anyone know if anything like this happens among players in other languages? Or something different?
I'd guess so, but maybe it's especially prevalant in Germany because German is a Germanic language, just like English, so most people tend to understand English. And because we're nit-picking bastards.