I had this same problem with my daughter's iBook, and the end result was the update had written a zero-length quicktime file that was required. Specifically /System/Library/Frameworks/QuickTime.framework/Versions/A/QuickTime was zero-length (even without finder you should be able to launch terminal if you've got it on your dock, so you can check this). Please post back if this same file is zero-length for you, because then this probably should be reported to apple.
I had these three issues: 1) Finder wouldn't start (fixed by getting a good copy of above file from my Powerbook). After fixing that, I found 2) X11 wouldn't start (/usr/X11R6/lib/libfreetype.6.3.dylib was zero length - same solution as #1). After fixing THAT, I found 3) I couldn't mount disk images.
At that point I decided to download the FULL 96MB upgrade installer from Apple's website. I opened it on my Powerbook so I could pull the .pkg file, transferred that to the ibook and installed. Everything was fixed at that point.
It would seem unlikely to me that repair permissions would affect an install in any way, since installs run sudo/root (and therefore ignore permissions).