I assume you have two hard drives. These should show in the dialogue box of system restore. The only thing I can suggest is to disconnect the drive not displayed, re-booot with the drive removed, power down and re-connect, and let your Xp find it and re-install.
I cannot remember turning off system restore. Each time I want to turn it on, I will always get the message: ''System Restore encountered an error trying to enable/disable one or more drives, please restart your machine and try again later.'' This error message surfaces again when I want to turn system restore on after the machine is restarted . I also think it is the main reason why 'windows updates' does not work when I want to get the latest patches for my OS from the internet.
I am using XP professional on a pentium 4 machine.