So-called 'restore DVDs' or 'recovery DVDs' are created by the manufacturer
of the computer, not Microsoft. As such, only the manufacturer of your
computer can provide authoratative answers to questions about their restore
DVD.
The error message you quoted sounds familiar. In future, be sure to post the
exact wording of error messages. I believe the error message you saw is
explained here:
"Error message when you install or start an MS-DOS or 16-bit Windows-based
program"
http://support.microsoft.com/default.aspx?scid=kb;en-us;324767
If System Restore "did not work" - you need to be more specific than that:
what happened when you tried it? - that is likely because one or more
restore points are corrupted. This is often (but not always) caused by a
virus, which may also be the cause of your original problem.
In that case, the only thing you can do is to delete all your restore points
and start fresh. Indeed, that's the only thing you want to do. You do this
by turning off SR and then turning it on again.
"How to turn on and turn off System Restore in Windows XP"
http://support.microsoft.com/default.aspx?scid=kb;en-us;310405