According to the file datestamps on the CTAN, the
xfrac package was last updated on 12/29/2011. I suppose it's possible that if you ran
tlmgr update --all since then, something migh have gone wrong in the update process without you noticing.
tlmgr install --reinstall xfrac
from the command line and see if this brings the needed relief. You may have to be in the directory
c:\texlive\2011\bin\win32 (or wherever
tlmgr.bat is located on your Windows system).
Addendum: I see from your comment that your current CTAN repository is
ctan.cms.math.ca. For what it's worth, the
xfrac package seems to be available at the CTAN mirror site
mirrors.med.harvard.edu (and probably many other CTAN mirror sites too). You might want to try running the command
tlmgr option repository http://mirror.ctan.org/systems/texlive/tlnet
tlmgr option repository http://mirrors.med.harvard.edu/ctan/systems/texlive/tlnet
from the command line (to reset tlmgr's default CTAN repository information) before (re)running the
tlmgr install ... command I suggested earlier.