The answer to your question is YES, if you restore then anything that is in system restore files will come back. Not sure who you mean by "same problem as the first individual writing" because YOU are the only one on this thread but the first thing I would do is uninstall "Spyspotter" and download some or all of the programs that are reputable. Spyspotter is on Eric Howe's rogue products list and you can read about it on this link.
Then I would download these and follow the directions on them. They are all free.
Spybot S&D (download, check for updates, read the tutorial and scan often, it also does some blocking)
SpywareBlaster (a blocker only, download it, check for updates, enable it and leave it alone except for checking for updates occasionally)
SpywareGuard (similiar to SpywareBlaster but works in a different way and does not update as often for that reason.
Ad-Aware SE (a scanner, download, check for updates, read the directions and scan.
cwshredder (stand alone unit)(another small scanner for certain things, ALL other windows should be closed)
Also do an online scan at one or all of these.
On the first one, make sure you checkmark the box that says "autoclean"
Housecall (using IE with Active-X)
Housecall (all browsers using java)
I have spyspotter on my machine and have the same problem as the first individual writing, however, now all I seem to have left is a run time error 429 associated with it, but I don't trust it. I have cleaned my machine of all spyware (or so I think), so if I restore settings to a previous date will my machine show those previously cleaned viruses?