When is using System Restore to restore your computer a bad thing? When it removes files and folders that you wanted to keep. Any new files or folders that were added to your computer after the restore date you select are subject to removal. You can protect files from System Restore however by moving any files that you deem extremely important to your My Documents folder. System Restore doesn't affect My Documents; that is; whatever's in My Documents before a system restore will still be there afterwards.
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