I just talked to a client of mine with the same problem. You need to back out of the updates. You can do this by performing a system restore. Reboot the computer and hit F8 repeatedly as it's booting up. When asked, choose Repair Windows. You will be asked for your password here, assuming you have one. At some point you will be given several choices, one is System Restore. Choose that and pick the previous system image from before the system update (I like to choose the one prior, just to be sure). This will not lose any of your files, it just changes the OS. Then do the restore. This fixed her problem. Afterwards, go into Windows update and turn off automatic updates, and wait at least a couple of weeks until they resolve this problem.
I expect Microsoft will find out about this one and fix it within a week or two, if not tomorrow if it's really bad.