So I used my computer this morning with no problems, everything was working flawlessly. I just opened it and turned it on about an hour ago and came up and everything had been wiped. All my documents, saves for games, pictures, videos, everything was gone. The only thing that did not get wiped was actual stuff that was downloaded to the computer.
Does anybody know how I can retrieve this or is it gone forever?
It's hard to say that the update wiped everything and not another update. You could search google on that update and see if anyone else had the same result. Otherwise it was probably something malicious or a friend/family member being bored.
Deleting a file only removes its entry from the directory structure; the data itself remains on the disk surface, only with its sectors marked for reuse by new data. If you stop as many processes as possible, you may be able to recover most of the files using an undeleter. It's not unusual for the things you'll really miss to get lost forever, though. Sigh...
+1 Lowest0ne, this could be as simple as a profile or permissions corruption in which case Windows will set you up with a temporary profile simply because it cannot verify your identity. This kind of error is MUCH more common when you are authenticating against a domain, especially with a slower network connection, but a corruption on the hard disk could cause this kind of problem as well.
To expand on what helios said, if you get to this point then an offline recovery is your best option. That way you know that the systems page file isn't overwriting any data on the disk that you are trying to pull from. If you're using EFS though things are going to be much, much harder to recover...