The client restore on Windows Server Essentials is excellent. But several security updates interfere with it. Below is a list of the security updates on Windows 7 that cause problems with the restore. I am using Windows Server 2012 R2 Essentials. This may or may not apply to Windows Server 2008 Essentials, Windows Server 2008 R2 Essentials, Windows Home Server 2011, or Windows Server 2012 Essentials. Below is also an up-to-date automated script to remove them.
Note: the backup works fine with the updates and so does the bare metal restore; this issue only occurs when you need to restore individual files. Also note: I do not know which updates in Windows 8, 8.1, or 10 interfere since I will never get any of those OS’s. (Windows 7 will be my last Windows unless Microsoft changes course and respects my privacy and stops trying to merge a tablet with a desktop.)
Note: This list is always slow to update because I wait a few weeks to a month just to make sure there is not a bad security update. (Windows 10 does not give you that luxury.) Some optional updates may not yet be on this list, they may appear several months later.
This list was last updated 10/4/2016. 29 bad updates are listed. Because Microsoft is now unwisely bundling all security updates into one big package from now on, this list will no longer be updated. The best thing you can now do is, on your server, create a virtual machine with a shell Windows 7/8/8.1, disable all updates are that virtual Windows, and use that only a individual file restore machine.