Windows 7 - can't change desktop theme after update, security policy changed

I am not sure what happened but I shut my machine down a few nights ago and the usual downloading updates started so I went to bed. the next evening I started my machine and I got an error after logon about security policy changed access denied and it logged me off... I tried to log back on and the system hung. so I powered off and back on, this time it too a long time to load, I logged on and the background desktop was black, so I tried to change it back to the windows 7 default by clicking personalize well I tried to select the windows 7 aero theme and nothing. then I clicked on change background. selected a color and clicked save changes but the background did not change, it's still black. so I click Window color color 1: and click apply. I get the following error.
The Visual styles could not be applied, Access is denied I a, logged on as Administrator so I an fearing that somthing is corupt.

Any Ideas?