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Not enough disk space is allocated to 'Backup and Restore'. Therefore, XP does not have enough (or none) restore points.
To fix this, log in with Admin rights (Admin account): Control Panel ---> System ---> System Restore ---> Settings ---> Disk Space Usage - set this to the max. (12% or something like that).
Restart the computer.
From this point forward, Win XP will create 'Restore' points as necessary.