I made an embarrassing mistake. Maybe you can save others from making the same mistake.
So what happened? Occasionally the power quality here slightly deteriorates for a few minutes. Not by much, just enough to make the UPS wildly click on and off. It does this so rapidly, that the poor UPS can miss a beat and my PC unexpectedly goes off. When my UPS started manically switching earlier this week, I started closing programs for a controlled shut-down, including an open QMC2 (running on Win7 x64). Too slow! Suddenly it switched off. Loading QMC2 up again after re-boot, _nearly_ everything was fine. Except for an empty 'Played' tab and 'Favourites' tab. Last played isn't that important, but Favourites are! Oddly, Favourites within Soft Lists were unaffected. Opening the mame.fav in the .qmc2 directory within C:\Users\MyUsername revealed it to be totally empty. Hmm, that's annoying but no problem; I'm careful enough to use both a UPS AND Backups. Specifically the built in Windows 7 backup tool. I'll just use that to restore the missing file, just like I've been doing for years to restore corrupted Firefox session files, or to restore anything else from C:\Users\MyUsername. What did I find when I searched the normally-fine default settings Windows 7 backups? No sign of the .qmc2 directory.
So I suppose my request would be, please put the .qmc2 directory in one of the AppData directories (AppData\Roaming perhaps?). Maybe that will save others who have successfully relied on default Win 7 Backup and Restore in the past, from being caught out in the same way I was.