Help! xml file is missing & system restore fails.

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Very grateful for any input.
Running Windows 7 Pro - Office 2007
Last windows update has caused issues (at least, everything was working fine before hand!)
Outlook froze after reboot. , System froze. Reboot then required dixkcheck which ran through a whole bunch of deletions before saying all was fine.
Outllok now unable to open as XML file not available. Issue with loading some but not all webpages (IE crashed, Chrome behaving oddly - some pages appear very strangely minus graphics).

Biggest problem is that system restore tried at three different points has failed on each occasion because of an error. Microsoft Fixit downloads (attempted to solve issue in Outlook) download and then fail to install due to 'error'.

Now at a loss and facing losing a mass of work if I have to re-install (last back up three weeks ago and thats a LOT of work down the drain, so any ideas as to cause and fix much appreciated.
 

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