Some solutions here
Are you getting any error message when trying to restore?
My restore points will not function. The system says they have been created but when I try to use one, it fails.
Windows XP Home
AMD Athlon XP 2800+
2.07 GHZ 1.93 GB Ram
No, true error message. Just that it failed and no changes were made to the pc.
I just looked at all the options in your suggestion and everything "appears"
to be as it should be.
I am presuming you are running an Antivirus program? If your restore points contain infected files 'System Restore' will not recover these points due to their infected state. (Antivirus doesn't usually remove infections from restore points).
Up until a few days ago I was running Norton 360 now I am giving Vipre a test run.
My guess is the restore points contain some quarantined viruses and norton is blocking them from being restored.
If you do not need any of the old restore points you can delete them by temporarily turning System Restore off, then turning it back on. (but note, this method will delete all the old points)