Files/Programs gone after Windows Update

After an automatic update was installed on Vista Home Premium, all file names
and program icons vanished. Symptoms:

- Able to boot into Windows
- Can view directories from the command prompt, amount of free space is
visible and apparently correct
- From the command prompt, can not view any files within the directories and
can not use the command prompt to copy files to a usb drive
- Able to see file names with Windows search feature, but we try to copy
files to a USB drive, we get the message "can't open the file because it
might have been deleted or is in a location that is not available"

Steps taken so far that have not been successful:

Uninstalled the update
Ran system restore to the "Last Known Good Configuration"
Tried to run chkdsk from within Windows without the automatic fix options -
it began running then crashed

Has this behavior been reported previously? Is there a fix?