If they used the Left button when dragging then Windows chooses what function to do and it probably chose to Move instead of Copy. WHen they encountered the error then all those files are lost. Thank you Microsoft.
Have you tried a restore?
Also check to see if they have done the Windows 7 required changes for Hoster -
http://www.mtu.com/upgrades/hoster/windows7-changes.htm
If you can restore them Make sure that next time they highlight, right click in the highlighted area and choose copy, then go to the desired folder right click in the empty space and choose paste from the list. This is the safest way to copy files.