when i had this problem (i don't know if subsequent updates have made this not an option) i had to delete the "ClientRegistry.blob" file, and then i had to restart Steam. it worked perfectly fine after that.
the file should be somewhere like this:
C/Program Files/Steam/ClientRegistry.blob
EDIT:
oh, and, i did check this. it is still there.
don't worry, restarting steam makes a new version of the file, it does not delete all your games or anything like that (although i would have thought it would).
'NOTHER EDIT:
this information came from a thread that was created recently when i bought this (i.e. a month ago) so i'm not exactly sure where it is now