I would post the issue about System Restore in the XP Forum.

As to the CDRW drives, if such is noted on boot and in the BIOS, then I always start my repairs by deleting a few registry keys noted in this article. Let me write that I do this even if Roxio software was never used.

http://www.roxio.com/en/support/uk/ecdc/drive_recovery.jhtml

Hint: I only do step 4.

Bob