I'm sorry to say that this is bad news.
This is a BUG in the update you installed...and it's reported all over the newsgroups.
See this link: http://www.infoworld.com/article/08/02/20/...;cgd=2008-02-20
In the meantime, do you have an image of your OS partition before the updates were installed (say prior to Feb. 12th)? If so, try restoring the image by booting into your recover media (eg: Norton Ghost or Acronis TI boot CD). If not, use the Vista DVD, boot from that and do a system restore to before Feb. 12th.
So far, I think that's the only workaround until MS$ works through this mess.