Depends on the restore disc !! -- as mentioned most of them will completly format the HDD partition and reset it to the way it was when purchased but others do include the windows REPAIR install option which will just overwrite all of the windows system files to their original state leaving all of your programs etc. in place.
Have you already run a few AV programs to see if there is an active virus on the system that might be able to be removed ?? - DO you have System REstore running and a selection of restore points that you could try that might be before the performance drop happened ?