Turning System Restore off will remove all restore points but leave the System Volume Information folder and other small but important files intact.
You should do this once you have removed the malware infestation from other parts of the computer using security software. After turning System Restore off restart the computer re-enable System Restore and create a restore point.
I am adding a canned response on cleaning your computer because they explain a better and potentially less harmful way to proceed than some of
the techniques being suggested elsewhere in this thread.
Select Start, All Programs, Accessories, System Tools, Disk CleanUp to empty your Recycle Bin, remove Temporary Internet Files and other selected
options. I also recommend you click on the More Options tab, System Restore and remove all but the latest System Restore point. Run Disk Defragmenter.
Using the System restore option is most appropriate when your system is running slow and you need to increase free disk space on your C partition.
If you have errors which might be resolved using System Restore to put your system settings back to before the error first occurred do not use this option.
If more than one person uses the computer and they have their own user Log on you need to run Disk CleanUp in each user profile to remove all unwanted
files.
A better programme than Disk CleanUp is cCleaner but note that cCleaner will not handle System Restore points. Removing older restore points can
be important if you have limited free disk space. cCleaner comes with a Registry tool. Do not use this tool as like any registry cleaner it can lead to the creation of very difficult to resolve system errors.
http://www.ccleaner.com/download
Hope this helps, Gerry Cornell