The same thing happened to me. Everytime I try to upgrade the Fences version it wipes out my fences.
Here's my situation: I'm still (happily) running Windows 7 and Fences 3.09. Everything works and all is well. When I try to upgrade Fences it all goes sidways. Back in August it first happened. I upgraded from Fences 3.09 to whatever version was being offered in August and after the install completed and I rebooted, my desktop was completely gone. Everything right down to the taskbar. Using Ctrl-Alt-Del, I managed to get to the Task Manager, then Explorer, and then run some programs. Eventually I was able to reinstall Fences 3.09 and everything -- including the fences and the icons -- came back and all was well again.
So I waited for Stardock to get the kinks out of the installer or whatever was screwing things up. Then I tried again today. I experienced the same result again but not as bad. By that I mean, it didn't take out the taskbar and desktop this time but the fences were gone. And I tried everything I could think of to bring the fences back. Nothing worked. Then I right-clicked on the desktop, clicked on the View option, then clicked on the Show desktop icons. The desktop icons reappeared but with no fences. They were in the same basic order but there were no fences. So now I will reinstall Fences 3.09.
I don't know what is happening when I upgrade, but that is the process I used to get my icons back. I hope that helps.