Vista - Old CAPICOM Update received?

I am running 32 bit Vista Home Premium SP1.
This morning Windows Update sent me a Security Update for CAPICOM (KB931906). I installed it, then realised all my passwords (e.g. in Outlook 2007 and various websites that normally remember my password) had gone. Re-entering them and ticking the "remember password" box had no effect. I uninstalled the update, but it still took two reboots before my passwords returned. (System Restore would not run and I was unable to boot into Safe Mode to try a Restore from there).
I have now found out the update in question dates from May 2007!
Why was this sent to me now and why did it foul up my passwords?

Hi foxycat,
I am afraid I can't help you with why it did what it did, but I did learn recently that Windows Update is not always reliable when it comes to telling you which updates you need. I had to do 2 Factory Image reinstalls after Windows installed updates automatically which caused my computer to seriously misbehave.
Since then, I have found several instances where Update tried to download updates that I either didn't need or were just not compatible with my system.
I have now set Windows Update to look for updates but not download and install them til I tell it to.
Then I look at the updates, research them (the Microsoft site is good for this.. )
If anything looks fishy (for example this past week Update tried to tell me I needed an update tha turned out to be for XP, not Vista) ask someone-the folks here are very helpful.
Create a restore point before making any changes.
Write down which updates you install as you install them. I usually do mine in small batches. This way if things go pear shaped, you know which ones to go back and uninstall.
Hope this helps
Peppurr

Thanks for the advice. A System Resore Point is no use to me as I cannot run System Restore on my system - the application simply doesn't launch, though something seems to be happening in the background. I cannot use Safe Mode either as pressing F8 repeatedly on boot has no effect :-(

I am sorry foxycat, I must leave you to someone more experienced as I am a novice
This forum is very good though. I am sure someone can help!
Good luck and let me know how you get on.
Peppurr