There seems to be an issue with the first service pack for Windows 7, I was reading an article about it yesterday morning when the phone rang. A customer had updated there 3 windows 7 computers, and it had failed on 2 of the 3.
In this particular case both machines had installed the Service Pack without problems, but the changes had caused problems with the start up. The start up repairs was unable to repair the issue.
To make matters worse the System Restore had been turned off on these machines, and so to get them up and running as quickly as possible the only real solution was to re-install windows!
Now if your system updates are handled by your server using WSUS, then apparently this Service Pack will be added on Tuesday, if you carry out stand alone install it is available already.
I would make sure you have a backup of any data on your computer, and I would carry out a manual System Restore point prior to installing. After sending out an alert about this yesterday to everyone on our mailing list, I had 1 back from an IT Repair shop who also had one like this on Wednesday. Just go careful when installing the Service Pack.