I have NEVER had to reinstall my operating system, not with XP or earlier versions. So I would say that's a bit drastic. You may mean this:
The most interesting issue is detailed in KB 942818. Apparently, some security programs may block IE 7 from connecting to the Internet. Since IE's files have changed, the signatures used by security programs may not recognize the updated browser version.
(Window Secrets)
KB 939653 is the offending update.