so i'm not actually sure that the update was responsible, but here goes.
i'm running build 7100 on a HP Compaq 8510w with 4GB RAM.
after the windows update of IE8, the next time i rebooted, Windows 7 errored saying i couldn't login because my user profile was deleted or corrupt. then it cancelled the login attempt.
i rebooted into "safe" mode and did a system restore to prior to the IE8 update and all works fine.
so, now i wonder if the IE8 update corrupted my user profile or if i had another problem (i haven't added or updated any applications on my machine) and the IE8 update was pure coincidence.