I agree with r53s ... if you got to spend all this time trying to figure out why your system restore isnt functioning correctly, & you got to get it restored for some reason or problem you're having with the pc, ... then I'd rather back my stuff up and do a complete reload.
If you indeed do a reload, might I suggest partitioning off a small part of your hard drive (if its large enough to begin with) to be a backup space, in case you need to do this again in the future (which you will from time to time). With the "backup" space on your hard drive, you can drag and drop what you want to save and only reformat the partition that holds your OS.