I agree that this problem is likely caused by the Windows Update. Otherwise, why would several people be reporting the exact same issue after updating? Frankly, I am surprised that this thread hasn't absolutely exploded with comments; surely hundreds of thousands, if not millions, of Win 7 users have been affected!
I am afraid that MS will ignore this, unless a lot more people start reporting this problem out!
Right now, Google Chrome is the only working browser I have, but it cannot automatically update. McAfee and Carbonite won't start (and have in fact disappeared from my task bar). The "helpful" suggestion that MS has is to re-install these programs, but of course downloading is blocked because of the missing .dll's.
Is MS listening????