I have had this same problem as well and the only way I could get it to work again was to re-install Win 7 but as an upgrade (not a clean install). After the re-install all my files and other programs remain as before and the Media Guide update works OK. Bit of a pain but as the OP stated without the guide update MCE is not too useful.
On a more positive note the QAM and HD functionality is great so this guide issue is an "inconvenience" right now and hopefully will be corrected in the official release. I am with Comcast and they recently switched everyone to digital cable and turning off many of the analog channels. With Win 7 MCE I have it all back plus HD.