I installed the Windows 7 service pack and restarted my computer, and now my savegames are missing. Anyone know where they went? Was this from the service pack or something else?

(If anyone has a savegame at the start of act 2, I'd be very happy. I did Mac Mordain, the Collector, and Nago,)

Windows 7 can hide your savegames in strange places. Check this thread for a possible location to look (it's for Might and Magic, but your Krondor saves will go to a similar place):

http://www.gog.com/en/forum/might_and_magic_series/world_of_xeen_where_did_my_saved_games_go

The virtual store is weird and it's possible that the service pack somehow made you lose access. Other things to try include running the game as administrator, and installing to a location other than Program Files as that folder has extra protections.

So are you able to load them in-game now? Windows has probably been saving them there but it sounded like the issue was that it suddenly lost access so when you fire up the game you don't see any of your savegames. Hopefully you managed to get them to load properly.