If system restore fails, it usually fails for good until we turn it off and on again which does wipe out old restore points.

About Avast. It's not perfect. None are! Try Grif's advice at http://forums.cnet.com/7726-19411_102-5070551.html?tag=posts;msg5070551 to be sure what those scans can find are found and gone.

Again, I would not fret the loss of System Restore. And after a decade of fixing XP, when SR fails, it's usually gone in 99.99% of the cases. (except for that Norton issue.)

As to Microsoft Word, the usual advice is to start Word in it's SAFE MODE (see google at WORD SAFE MODE) and if that works, look at suggestions. If not, uninstall and reinstall Word.
Bob