Not sure there. I am having wierd issues with new release. Things I make go away show back up again and then have to clean cache out again to make them stay away..lol Other then that things are going good. I did how ever have issues after upgrading to d7.0.3 from d7.0.2 so I just took a back up of my website, then deleted it and reinstalled the new release d7.0.3 and added old data base to it, and all went very well. I had to import some sql files sepeartley as i went along but in the end got all my members back and all their content.
As for backups, I make sure I back up everyday, as the problems you are having could be solved with a clean install (if not heavy modded) and old data base. Sorry I can not help you,hope another will soon come along. Try to search for password on here, there are a few things I saw that might help you, but did not help me. As for your back ups, you should have no issues with that if you go to your php-admin in cpanel section.
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