It restores a previous Windows XP config from what's called a "restore point." What it's basically for is if you install a program or new hardware device, and for some reason you get some kind of serious error or problem, you can use the restore feature to go "back in time" to a previous config. It creates a hidden folder called "System Volume Information" and inside that folder you will find different "restore point" folders. This can eat up valuable hard drive space over time, but you can configure it to use less.