Gary, I don't know the answer as to why system restore won't work for you, but I can tell you I would advise reducing the size from 12% to something less. I use 3%. The reason for this is you probably will only want to restore to the last backup or so (that is if you can get it working.) Using 12% would probably give you several weeks of backup. If you did go to one of the earlier restore point, you would loose a lot of changes made since that time. If you use the last backup or so, you will loose only the changes since that backup.
You can adjust the amount o disk space used by System Restore in the control panel "System" applet. click on the "System Restore" tab and adjust the slider, moving it left reduces the amount of disk space used. In other words, you probably don't need 30+ seperate restore points, 7 or 8 is probably enough.
There is a lot of misunderstanding of what System Restore actually does. A good article can be found here:
http://ask-leo.com/why_cant_i_rely_on_s ... ckups.html
Read the comments also - apparently you can't adjust the size in Vista, you can in XP.
I am curious, what problems are you having that prompted you to try System Restore?
A few additional thoughts - you could try turning system restore off, then restarting it. This might fix the problem you mention of not being able to restore. Then immediatly set a manual restore point and see if that works. That way you will know right away whether you can rely on it or not.
N²