I have nothing against System Restore when it's used for immediate reversal of an installation that can't seem to correct or undo itself. And, under the right circumstances, it can be useful for getting a farkled system back up and running. But it disturbs me when I see someone use it to go "time traveling" back to earlier system states on an important workstation, or even a home system on which valuable information is stored. Certainly, it may get the system up and running again, and that's cool when you need to keep using it. However, if you've used System Restore to do more than just reverse the most recent changes made to a system, I think you're potentially leaving the system with an undefined security status. And Windows / Microsoft Update doesn't always (ever?) seem to realize that you've invalidated some of the security updates by using it.
If I had to use System Restore to regain use of an important system on a temporary basis, I'd do it. But I'd be doing a clean installation on that system as soon as possible -- unless, as I said before, the utility had only been used to go one or a couple of images back. If I went back past the last time any critical updates had been applied I'd want the system totally reconfigured from scratch.
I do have it enabled on all of my WinXP systems. Why not? It's very sparing of CPU time, and hard drives are large, fast, and cheap these days. No reason to turn it off, as far as I'm concerned.