what anti-virus do you have?
have you tried scanning for viruses in safe mode? if that doesn't help than indeed your last resort might be system restore but remember to restore from a dvd/cd that came with your computer (and not by "control panel/ restore") or if it's a custom built reinstall xp on a formated drive.
And please explain this in a little more detail
But SVChost.exe is stopping my backup efforts.
what exactly is going on?