For one you don't reformat a drive but simply reinstall a fresh copy of IE 7 to see any problems corrected. First go into the DocumentsandSettings>user name>favorites to back everything up to a custom folder.
Once you download and save a fresh copy to a folder go into the control panel to uninstall the current one. After simply run the new copy followed by checking to see if the links appear once that is running or you simply need to recopy them back into the new folder created.
Can someone telll me all the time someone wants to reformat the entire drive for a smaller problem? If Winodws is a total waste or you run into a nasty virus infection that's when you often have to wipe everything to start all over. For your problem there it's limited to one item you can reinstall easily.