Whenever I click on system restore in xp I get the following message: system restore application has encountered a problem and needs to close I've tried to open system restore even in safe mode but still get the same message. I just have no access to it whatsoever.

Unless you try something like barts or UBCD4Win to do a restore you choice would be a full clean install.

How do I reinstall System Restore? Warning: This will delete ALL existing restore points. Go to Start - Run and type %Windir%\INF then press enter. In Windows Explorer go to Tools - Folder Options - View Tab and uncheck “Hide extensions for known file types”. Find the sr.inf file, right click on it and select Install. Or simply type or paste the following command into the Start - Run box and press enter. rundll32.exe advpack.dll,LaunchINFSection C:\Windows\Inf\sr.inf If the Files Needed dialog box appears, click Browse and point to the i386 folder on the Windows XP CD or to the i386 folder on the hard drive, if it exists, of for systems updated with the Service Pack 2 CD or Download from Microsoft, browse to the C:\Windows\ServicePackFiles\i386 folder.

Might consider too using sfc.exe to check system files.

Could you explain how to do this since I have had no success with the previous suggestions?

From the command prompt use sfc.exe /scannow. It will ask for the original CD. Can't be a restore disk. Then it will check many files against what is on the CD. You could consider a system repair from the CD too. I usually prefer a clean install if I have to go that far.