I like System Restore as long as you have the HD space to keep the backups. It isn't a perfect backup solution, but is better than nothing. It is also a quick and dirty way of getting back to a working configuration if something goes wrong without needing to do a full install.
I think the best thing for you to do would be to get the system to where it is clean and running well. Delete all of the old restore files, they are in a hidden folder that can only be seen when restore is disabled (C:\_Restore). Then enable System Restore again, and create a new fresh restore point. That should remove all traces of any infection you had, and prevent an accidental restore to an infected state.