Never install third party drivers from Windows Update. I lost about one day trying to get one virtual machine working again. It turned out that during the last updates I installed a new driver for my video card. This unfortunately resulted in conflict with the network adapter driver and leaving the machine without any connectivity. As Shenan Stanley, another Microsoft MVP, states in TechArena Community post:
“It has been explained before – many times – on these newsgroups by many different people that relying on the Windows Updates for hardware drivers should *not* be done. The hardware drivers that appear there have to be submitted to Microsoft by the hardware vendors anyway. They have to pay for the priviledge to have them placed there. There is also a process through which the drivers to be placed there have to go through to get the ‘logo’/’certified’. That all takes time. By the time it is done – usually several releases from the manufacturer have passed by – sometimes solving issues with that original driver, sometimes just new features, sometimes nothing major.”

In my case I had to completely uninstall ATI PCI Express (3GIO) Filter Driver to get the machine running fine. If you have similar problems, open Device Manager and look for devices with yellow exclamation mark. When you open properties of the failed device and click Resources you will see this error:
Code 12: This device cannot find enough free resources that it can use.
On my machine I got the error for two devices: VM Additions S3 Trio32/64 and Intel 21140-Based PCI Fast Ethernet Adapter (Emulated).

Steps to uninstall the driver:

Vindows Vista
1. Go to Device Manager (To access device manager, Go to START/CONTROL PANEL/SYSTEM & MAINTENANCE/SYSTEM/DEVICE MANAGER
3. Find “ATI PCI EXPRESS (3GIO) FILTER DRIVER” and delete it.
4. Reboot
5. Check and make sure “ATI PCI EXPRESS (3GIO) FILTER” has been deleted. If it has not, restart at step 3
6. If it has been deleted, Reboot 1 or 2 more times and then your computer should be OK.

Make sure that you check Delete the driver software for this device when you uninstall it, otherwise Vista will install it again when you restart.

Good luck!

PS: This is my 200th blog post <edited>and third year of blogging</edited>. Of course, I never imagined that I could write for such a long time. Please let me know what would you like to see more, what you do not like and any other feedback you may have. Thanks for reading!