The last time I had this problem, it was caused by a virus.

Do you have and exact error message that it gave you? Depending on that it could be a number of things. 1) Bad HD 2) Bad or scratched resotre CD 3) Simple user error (could be that you didn't check or checked a certain option) 4) A bootsector virus 5) Other bad hardware (I've seen where bad RAM has prevented a restore) I would try to format the drive completely using a low level format program, then try and restore it. If this fails, test the Hardware. If all hardware is good then call the manufacter for a new set of restore cds. If still no luck, try taking it to a computer repair shop to see what could be wrong (you may just want to try this first, if you don't want to mess with the repair yourself)

To explain my rating on samirpx's answer - there are many possibile reasons that System Restore failed on your computer. Some of those lie within the System Restore program and/or SR's files, which could be corrupt. I've gotten the same error message a hundred times on three different computers and amazingly enough, they all still work just fine, without resorting to drastic measures for the fix. As far as the low level formatting of your hard drive as a remedy, it's a little like throwing everything in your refrigerator, including the shelves and light bulb, in the trash because you got a whiff of something funky when the door was open. 86'ing everything is an extreme reaction, don't you think? Please read the following information, especially the last sentence: "Low-level formatting is the process of outlining the positions of the tracks and sectors on the hard disk, and writing the control structures that define where the tracks and sectors are. This is often called a "true" formatting operation, because it really creates the physical format that defines where the data is stored on the disk. The first time that a low-level format ("LLF") is performed on a hard disk, the disk's platters start out empty. That's the last time the platters will be empty for the life of the drive. If an LLF is done on a disk with data on it already, the data is permanently erased (save heroic data recovery measures which are sometimes possible)." http://www.pcguide.com/ref/hdd/geom/formatLow-c.html It's easy to get "low-level" confused with "low-key" and then assume that low-level formatting is kind of a laid-back, non-intrusive process that really isn't "formatting", but more like "fixing". It fixes your data problems alright - by obliterating all the data. No data, no problem. From what I understand, LLF is a process that's usually performed by the disk manufacturer at the factory. Is SR actually running on your computer? It's not always clear. In Win XP, SR needs the Remote Procedure Call (RPC) be functioning in order to work. Also, check to make sure you have restore points that Windows can use for restoration. If those restore points have been deleted, Windows will usually tell you, but not always. I've gone back into SR after a failure and found all the dates and times that SR had offered up 5 minutes before as viable restoration points - gone. Here's a link to Microsoft's FAQ page about SR in Win XP: This will tell you how to make sure SR is in good working order from now on, and also, how to find out what went wrong. (Scroll down to "Troubleshooting") http://www.microsoft.com/technet/prodtechnol/winxppro/plan/faqsrwxp.mspx Here's another good link: http://www.kellys-korner-xp.com/xp_restore.htm Viruses, bad sectors on a hard drive, improper shutdown, corrupt registry keys - those can all be reasons for SR's failure. Win XP SP1 fixed a few problems with SR, and I had enough problems with SP2, to make checking on SR's status a low-priority. Try the least invasive step possible as a fix. You can always (according to Microsoft) reinstall System Restore and start anew. Good luck.