System Restore disabled, regedit resetting, ideas?

So I got some malware I'm guessing, don't ask how.

My other laptop froze up today, so I had to restart (safe mode to get anywhere), noticed a new admin user and desktop was fubar'd and of course I get a message trying to run System Restore talking about a group policy restriction. I've looked at all kinds of threads on the issues and tried everything I can, but still can't get it to run. I've tried deleting the DisableSR registry key, it just comes back after closing, same with trying to update the key to something else. I've gone into group policies and it already says the turn off function is not configured.

I can't find my stinkin' CD's (after looking through the hundreds of random discs I have boxed up), so I'm at my wit's end...

Running XP Pro on a Dell Inspiron 6000 if that helps, thanks in advance!