Updated iTunes and iTunes reset

I updated my iTunes on my iMac to the 10.3.1 version.  When I went to reuse it again after rebooting, I noticed my desk top was wiped clean and placed into a folder called "Desktop" in my HD.
Then when I went to open iTunes, it opened as if I had never had iTunes installed on my comp before.  My music was wiped out, playlists gone, etc..  I found my music on my HD, however I could not get iTunes to load up with my personal information.  What did I do wrong?  Or what can I do to get my iTunes back to what it was (with playlists, play counts, music, album art, etc.)
I also noticed that my desktop was restored with my files and folders again when I rebooting my computer for the second time...and these items were no longer placed in a "Desktop" folder on the HD. 
Not sure what's going on with that iTunes update.
I also have a Time Machine...so if need be I can restore my computer back to what it was before I updated iTunes, right?  And if I do...how do I prevent this whole issue from happening again when I update iTunes?
Thanks so much for your time everyone...hope someone can help!

Please copy and paste your post to the iTunes forum.

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