I'm also having problems on my Acer laptop running Windows 7 after a Windows update last week.
Symptoms
Normal start-up to Windows 7. Then hard drive is going 100% all of the time. CPU activity minimal. Computer slows down to a crawl. Programs won't start - timing out - or very very slow.
Ctrl+Alt+Del returned message - The log on process was unable to display security and log options when CTRL+ALT+DEL was pressed. If Operating system does not respond pres ESC or shut down via power switch."
Having to shut down via power switch or Windows has to force it as programs won't close.
Actions Taken
System restore via safe mode (several times!) . Then start up repair required. Computer then works normally. Went to Windows Update to manually control updates but that doesn't seem to work. If I deselect all the updates - press Ok then close and then re-open
Windows Update they have all been reselected again. Tried Windows Update online repair which didn't seem to make much difference with on normal shutdown the message installing updates appeared on the monitor.
Looking at the event viewer some updates installed correctly at the first attempt but having been removed on the system restore don't seem to have loaded successfully again.