Windows System Restore can and does backup malware files which can then be reinstalled if you ever restore to a previous point. To prevent this, we need to purge your Restore points:
Go to Start->Control Panel->System, System Restore. Click "Turn off System Restore". That will erase all restore points. You will be prompted to reboot. When Windows restarts, immediately go back in and uncheck "Turn off System Restore" to re-enable it. Windows will automatically create a new restore point.
To reduce re-infection potential for malware in the future:
Please read Tony Klein's article: So how did I get infected in the first place?.
It is extremely important to keep Windows and Internet Explorer up-to-date. Please go to http://v5.windowsupd...t.aspx?ln=en-us regularly and install ALL critical updates.
It would be a good idea to install a firewall if you don't have one . Here are a few free ones:
Kerio Personal Firewall
Sygate Personal Firewall
I strongly recommend installing three free programs: SpywareBlaster, SpywareGuard, and IE/Spyad.
Use AdAware SE and Spybot S&D regularly to scan your system. Links to excellent tutorials on these programs are in my signature below.
Finally, I suggest downloading and trying Mozilla Firefox browser. Firefox is a free fully functional browser. It's much safer than Internet Explorer.