Domain and local Administrator does not have privileges

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As domain and local Administrator, I tried downloading Windows updates
including IE but only a few of the updates worked but not IE 7. I had
to create a user and grant Administrator rights and then only did it
allow me to update. Also System Restore does not work under Domain and
Local Administrator. I checked the security policy and Administrator
has rights for the most part across the board (including system restore
service). I also tried restarting the System Restore service but I
still get the message:

You do not have sufficient provileges to restore your system. Please
contact your administrator, or logout and log in again as an
administrator and try again.


Any ideas?

 

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I did try logging under the local computer and using the local
Administrator password and it doesn't work either.