Restoring to an earlier point is a poor option and rarely works well.
SYSTEM RESTORE
Win XP-ME - How to disable
System RestoreOnce you have disabled system restore, reboot, that should automatically delete the contents of the _Restore folders. Scan your PC again and if clear enable system restore.
If that hasn't resolved it (keep system restore disabled) reboot into safe mode (usually by pressing the F8 key during boot. This stops many programs running and getting into memory (including some viri), once in run avast and scan in boot mode.
SYSTEM RESTORE - Info - Troubleshooting
There are many, many reasons why a System Restore may fail. For example, see "Why are previous restore points not working?" in the "Troubleshooting" section of this official Microsoft page:
http://www.microsoft.com/technet/prodtechnol/winxppro/plan/faqsrwxp.mspxThere's lots more on that page that's worth reading too. Note especially the sections on "Does System Restore protect personal data files?" (the short answer: no); "What should I do if System Restore does not work?"; "Why are my restore points missing or deleted?"; "Why does the System Restore Wizard lockup?"; and so on. Just a few minutes on that page ought to convince just about anyone that System Restore is not intended for heavy-duty system protection!
More info:
http://www.kellys-korner-xp.com/xp_restore.htmhttp://www.experts-exchange.com/Operating_Systems/WinME/Q_20718080.html