I doubt it is a hardware problem.
More likely to be a software probelm as in the update excited a few files causing the message to appear...
I would not worry about it.
"I thought that all microsoft windows updates were perfectly safe to install into the computer but after this update i don't know whether is should install any more."
They are safe but as you have come to know one update caused you to post this message. Milllions of other people update without hassle.
If you read very carefully what MS have to say about the updates. The trick is to find out if you really need a particuliar update. Then update or ignore the update.
"I'm afraid that it might permanently damage my PC. Any help?"
No you will not permanently do anything...Just carry on as normal.