|From what I can make out, sys.exe is a virus. There is definitely not one on my XP Home and I doubt it is on pro either.|
If Windows still boots (either normally or via Safe Mode) then you need to check for viruses.
Most "restore disks" do just that, so the computer is like the day you bought it (without anything you have added since).
You can get your own stuff off by using a Linux Live CD (such as Puppy Linux) - can give more detail if required.
Always pop back and let us know the outcome - thanks