all system restore is like a backup copy of your "c" drive so it can "restore" it to the way it was before you screwed it up or got a virus. it keeps certain restore points according to the disk space usage limits you set for it. default uses a lot of disk space and can have around 15+ seperate dates to select as restore points. i keep mine set on the first notch which for a 320gb hdd is around 3-4gb of space dedicated to restore file space and it gives me 7-8 dates for restore points which is plenty since i pick a restore date that only go back one or two days anyway.
to turn it on or off you open it and to the left side it says "system restore settings" so open it and select to turn off system restore and apply. then i reboot and open system restore which prompts me to turn it on so i do then reset the abount of space/restore points i want.
one thing to remember about system restore, it will remove things you added recently but it cant bring back something that has been deleted so if you delete or uninstall the wrong thing and your trying to get your files back or a program quits working on you, system restore cant help you.