This sounds like what happened when I updated to ZoneAlarm 3 when it first came out. I could not do a system restore and had lost files, could not get linked to sites. I had to uninstall ZA3 and then do a system restore. Seems like I had to do something else as well in the way of an uninstall as well. Any way I just keep going back until I could get the system restore to work and then all was fine with the world once again.......