For the System Restore problem (which, as mentioned, won't get your photos back):
System Restore may be completely wonked, as Restore Points are "chained" together and interdependent, so that if one is corrupted, none will work, but try this:
Delete all but the most recent System Restore Point
Go to Start => Run and type in "cleanmgr" {without the quotes}
Select your installation drive (usually C:\)
Wait till the utility is finished scanning - a few minutes
Click the 'More Options' tab
In the System Restore section, click the 'Clean Up' button.
As a check, you can restart the computer to see if the single remaining Restore Point will Restore.
If you do, and it does restore successfully, but you want to revert to the original state, restart System Restore and select to Undo the last Restore Point.
If this doesnt work, then your only option is this:
System Restore - delete all Restore Points
Right-click on My Computer and click on 'Properties'
Click on the 'System Restore' tab to open the System Restore configuration window.
Check the box 'Turn off System Restore on all drives'.
Restart the computer. This will delete all previous Restore Points.
If you want to re-enable System Restore, go back to the System Restore configuration window.
Uncheck the box ''Turn off System Restore on all drives'.
Exit the configuration window and open System Restore.
Create a Restore Point
As a check, you can restart the computer to see if the single Restore Point will Restore.
If you do, and it does restore successfully, but you want to revert to the original state, restart System Restore and select to Undo the last Restore Point.
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This utility is also pretty good at file recovery:
recuva