Mission Control has no spaces, background image doesn't change and Launchpad background is dark

Question

I just ran a system update on Lion and after the reboot I got issues with Mission Control.

Namely,

1. When I trigger Mission Control, it only shows windows on current space and doesn't provide a way to add or switch between spaces. The whole top bar is missing.
2. When I trigger Launchpad, it shows on a background that has nothing to do with the desktop background image, as if the underlying image was black.
3. Changing background image in Preferences doesn't take effect until a restart.

This is very frustrating and seems like a bug. How do I fix this?