Not as terrible as it sounds, but it might alarm some users.
From the Tools menu, Options, General, Groups, I had to browse to where my fonts are organised and change the default folder from:
*C:\Documents and Settings\Bhikkhu Pesala\My Documents\My Font Groups*
back to:
C:\Documents and Settings\Bhikkhu Pesala\My Documents\My Fonts
Could the update do this or was it perhaps Ashampoo Win Optimiser that I used earlier today to clear redundant Windows Registry entries?