Had you changed the location of your saved folder? If so, restoring defaults probably changed the location of your saved folder back to C:\Documents and Settings\your username\Shared.

Use your computer's search to look for some of the missing file names. Unless you've deleted them from LW's library without saving them somewhere else first, they should be around somewhere.

To change your default player, open your saved folder outside of LW. Right click on a file > open with > choose program. Select your player from the list & tick the box to 'always use the selected program to open files of this type' > ok.