Recovering a library that's been affected by an update, following the procedure described above, should work, at least in the case where the iTunes database is corrupted by the update process. Obviously this shouldn't happen but does occur - I've never seen a definitive statement of a cause for this occurrence - and if that cause was known I'm sure Apple could have addressed it long ago. There are suggestions, though, that it could result from a conflict between Apple's installer/updater software and other processes that are interacting with the same files. Again, there's no definite evidence for this but there has been some finger-pointing in the direction of some anti-virus tools and Windows' own indexing processes. All I can state is that I've been fortunate enough to have never encountered a problem with iTunes updates (over 10+ years of iTunes use), and that I've always configured both the real-time file checking components of A/V tools and Windows' indexing services to omit processing of my iTunes library folders.
However, the process based on recovering a pre-update copy of the iTunes Library.itl file from the Previous iTunes Libraries folder is no substitute for creating and maintaining a full backup of your iTunes library, and making sure that you update the backup immediately before installing an update to iTunes. If you can't immediately and simply restore your library from whatever "backup" you have then the latter isn't a viable backup. Even if iTunes' operations and update processes were 100% robust you still need to take account of the fact that hard drives fail, always fail, and in most cases do so without any prior warning. Paraphrasing another contributor here, to have a library that represents "$100s or $1000s of dollars in 'license fees' and organizing it to my liking (spending days doing so)" without an effective backup strategy is like not taking out insurance on your home.
