A Good Example of how System Restore Is NOT A BACKUP
There are a hundred reasons why System Restore may not be working on your Windows 7 System. Corrupt files, failing hard drive, bad RAM, viruses, malware, and a host of other potential problems. System Restore is a utility provided by the Windows 7 Operating System that affects Windows system files, programs, and registry settings. It can also make changes to scripts, batch files, and other types of executable files on your computer. But System Restore is not intended to be "A BACKUP" for your computer system as much as it is intended to be a "GO BACK" feature when things go wrong. It works best when attempting to recover from a bad update, a faulty driver, or corrupted file. Unfortunately, System Restore is HIGHLY UNRELIABLE as a tool for complete restoration.
Even Microsoft Recommends that users create a System Backup soon after receiving a new computer, or reloading the Windows Operating System. They also suggest you should create a "Recovery Disk" which can serve as a true restoration point for your system, and back up your system on a regular basis.
I've been banging my drum for years here on CNET about backups, and over that time the only thing that's changed is that today it's cheaper and easier than ever to keep your system and files backed up and safeguarded from disaster. This is just my humble opinion of course, but if you are going to spend $400 - $1,000 or more for a computer system, it just makes good sense to spend an extra $50-$60 bucks to have a reliable backup drive. On my home system I think I have 4 hard drives running 24/7. Every one of the hard drives has a clone that sits on my shelf at the ready in case I need it.
My final piece of advice regarding your situation Paul, is to consider doing a "Repair Installation" of Windows 7. Much like System Restore, a Repair Installation is not a cure all, but it should remedy the problem you seem to be having with System Restore not working at all. You should remember that a Repair Installation is a method of LAST RESORT, in an attempt to get Windows 7 functioning properly and at the same time preserving all of your data. If you're planning on attempting this procedure, MAKE SURE YOU BACK UP IMPORTANT FILES FIRST. It sounds like you have Windows 7 working with a few exceptions, so after you back up your files, a repair installation should do the job for you.
Best of Luck