Maybe this is common knowledge, but it took some hunting down to find. I had a screw up where I was performing my first backup of a new client to WHS 2011 of a Windows 7 Home Premium machine... on a TUESDAY NIGHT!!!" So "Patch Tuesday" did its thing, and pretty much sabotaged the backup.
But something worse happened: it seems as a result of the hijack, permissions on the system seem to have gotten screwed up. The first tell was that I wasn't able to launch the WHS Dashboard without getting an error message: "Windows Server Dashboard has stopped working"
The easy fix in this particular case is to launch Dashboard as an administrator. This can be done every time or permanently by going into the exec properties and checking off "Run the program as an administrator", on the Compatability page.
When I look at the System logs I see several new errors with services failing because of permssion issues. Obviously I'm going to have to roll up my sleeves and try to fix some other stuff. BTW: I tried the last useful system restore point, but it failed because it couldn't find the contents of the IE cache... like that's important in any way....
[...removed extreme sarcastic statement about Microsoft's endemic lack of foresight...]
If Windows Update can screw up a machine doing a backup on WHS, is it possible that the many problems reported here and eslewhere regarding Dashboard, Launchpad and other connectivity problems are caused by forced restarts during the backup procedure causing premission issues? If so, where's the "OMIT PATCH TUESDAY" button in the Home Server backup schedule setup?...