looks like it's using a different profile
to make sure, in kmeleon; lick on edit> "manage profiles"
see if there's more than profile entry listed.. if there is, that means your update is probably using a second profile.. in that case, in manage profiles dialog select:
ask at startup..
restart kmeleon.. and select the other profile..if you see everything working fine.. bookmarks restored etc then fixed
if you don't have other profiles listed..then, it's possible the bookmarks plugin has been removed or disabled in preferences
open preferences, go to kmeleon plugins and make sure 'netscape bookmarks' is checked.. restart kmeleon
if you can't find bookmarks plugin listed then it could have been removed..in that case.. download this file :
save in k-meleon\kplugins folder.. restart kmeleon