Richard, as long as a virus scan doesn't reveal a virus in the main sytem or data files, its OK to set a new Restore point even with the virus in a previous Restore cache. The virus won't be in the files that are copied to the new Restore cache
The next step in the procedure in 419's solution deletes any infected Restore cache(s) and it's a neat way to access the System Information folder that is normally barred even to Administrators. (Except the really bolshie ones like me who don't like to be told by some pesky bit of software where I can and can't go
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I'm not basically against doing a fresh install of XP; they pretty easy and quick (40-60 mins?). The problem comes when you have to spend the next several hours downloading the updates and patches from the update site.
Best Wishes, fobs