I know of only one way that this can happen in windows, and has nothing to do with Steam other than their not-so-great decision to install all content into Program Files.
If you are on Windows 7 or Windows Vista, and you have UAC set to ON, then change it later to OFF, this can happen.
UAC does thing evil thing where if a program tries to write to a "protected" area like Program Files, EVEN IF YOU ARE ADMINISTRATOR, when you get a UAC prompt and give permission, it actually writes any files that would normally go into that directory into a "virtualized" directory somewhere else.
If you turn off UAC, that will no longer happen, and as an awesome bonus, it will no longer know about the files that it virtualized.
So in your case, if you had UAC on, installed a ton of games, then later got sick of UAC and turned it off, this would happen as you described.
See the second paragraph in "Features" in the article on User Account Control.
If you have done this and turn on UAC again, your content will come back, but be a TOTAL mess because if you've downloaded more stuff with UAC off, then that will be invisible when you turn UAC on, and vice versa.
this drove me a little crazy once before I realized what was happening.
i'm curious to know if this is your issue.
Best Answer
Some ways to fix Steam
Rebuild your ClientRegistry.blob
This is pulled off the Steam KB
Watch out for other programs!
It is known that programs such as Airfoil and F-Secure may cause problems with steam. Valve lists many of them here. Try toggling your virus protection, firewall, etc. to see what is causing steam to be unhappy. Try starting your computer in safe mode by pushing f8 before the windows logo comes up.
Try out the Steam Fix Program
This program claims to fix a wide variety of issues. Simply run it and follow the directions. The downloads are on various KB articles such as this one.
Validate game cache
If a game is having problems, rather than mess around with installs, try validating your cache! Cache validation is accomplished by right clicking the game in library and clicking the Local Files tab on top. Now, click the button that says Verify integrity of game cache. Be patient as this takes a long time
If all of this fails...
First, try a restart of your computer. Give steam another shot and if it doesn't work, it's time to reinstall. In this steam KB, it is outlined how to do a complete reinstall. ALL OF YOUR STEAM FILES WILL BE GONE. Please, make sure you know your password and you are willing to wait for games to re-download. If you want, move your steamapps ( C:\Program Files\Steam or C:\Program Files(x86) )
FOR ADVANCED USERS: If you really want to wipe out your old install, head over to your Program Files or Program Files(x86) folder. Find the Steam directory and delete it. And, with regedit:
Don't do this if you don't know what you are doing, and please, make backups.