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well first thing to do is the OTA update. then if the clock app is still gone let me know. also are you rooted/custom rom? how are you trying to add a city on the world clock? a good troubleshooting step is to wipe the cache partition from recovery. hope this helps
whats is your software version? go to settings/about phone/software info. when inside the app, can you add any city or just not the one that you want? either way, one thing to try is to delete the widget and then re-add it. to get to recovery, power off the phone. then hold vol down. press and release power but keep holding vol down until you get to the bootloader. press vol down until recovery is highlighted then press power. when you see the red triangle, press vol up and then press power. this will take you to the recovery menu. press vol down until wipe cache partition is highlighted then press power. when thats done, reboot system now.
go to settings/applications/manage apps/all tab and look for the clock app there.
ok so try this...open the app drawer (all apps) then press the search and type in clock. if it pulls the app up then try to make a shortcut to it on the home screen