Blinking folder with question mark after doing update

I just upgraded a Mac from Leopard to Snow Leopard. Next, I downloaded and installed the most recent Snow Leopard updates to bring it to 10.6.8
After installing the update there was a period of time where nothing was onscreen and than a blinking folder with a question mark appeared.

I cut the power and rebooted and it seems to be working ok.

1. Is there some damage done to the installation? Should I reformat and start over? I just do not want it to cause a problem later on when I start doing work on it.

Thanks.