After "update-grub" in Ubuntu no Windows 7

Linux default behaviour is to take over the boot process unless you use "advanced" options to stop it, and keep grub in the Linux boot sector. Presumably the "update grub" does the same.
I haven't done that personally, so can't say for sure.
Doesn't the update have a "custom" or "advanced options" button leading to a dialogue for the placement of the boot files ?
I think update-grub writes the new menu.conf file *and* writes the MBR. You just need to fix the MBR from either EasyBCD or the Vista/7 recovery disks.
run update-grub2 instead

You don't have to use recovery disks or whatsoever..

When Windows 7 disappeared after you ran an update-grub, just run update-grub2 and it wil be back again!