If you are having basic computer problems such as an application that works one day and not the next, the last thing you want to do is start applying upgrades and updates. Often it will make things worse unless you are lucky and the upgrade happens to re-install the application component that went missing in the first place.
Did you run Disc Utility to verify your hard drive and repair permissions? That's the first thing I would have done. You need to repair permissions before installing any new software (be it the system update to 10.6.8, or an iTunes upgrade). Of course before doing any of that you should back up your computer, though in your case I wouldn't have backed up a computer showing issues because that might have replaced a good backup with one that had issues.
Software update, upgrade--what's the difference? - http://support.apple.com/kb/HT1444
Resolve startup issues and perform disk maintenance with Disk Utility and fsck (Mac OS X 10.1 - Mac OS X 10.8) - http://support.apple.com/kb/TS1417
About Disk Utility's Repair Disk Permissions feature - http://support.apple.com/kb/HT1452