Windows 7 - Windows Update destroyed my configuration

Windows updated itself this morning and automatically rebooted, but when it did it completely removed my desktop and seemed to wipe everything else out relating to my history and configuration. Also, it did not connect to my wireless network.

I did receive one error message about the Desktop in System32 not being found but I don't recall the exact message.

I rebooted using F8 and selected to boot to the last known good configuration, which fixed the problem for the moment by restoring my desktop etc., but now I am worried that Windows Update will just do the same thing again.


Possibly related to this, I am unable to set up System Restore because I get the error about filename, directory name, or volume label syntax is incorrect (0x8007007B) whenever I do. I have searched for this problem and people are saying to check the checkbox next to the OS item with the Windows icon, but I don't have a checkbox. If I choose to Create a Restore Point using the button I can do so, but I cannot configure System Restore.

I am on an OEM version of Win 7 HP 64 on an Asus laptop.