Something is wrong here, as per microsofts website here: System Restore: frequently asked questions
How often are restore points created?
Restore points are created automatically every day, and just before significant system events, such as the installation of a program or device driver
. You can also create a restore point manually.
Which is why i suspect something might be wrong. When you create a restore point manually, does it work? You could try turning off the system protection, restart and turn it back on. Very strange though....
1.) My only suggestion is to go into msconfig and disable all running startup programs except critical windows ones and your antivirus. Then see what happens. It sounds to me like the system is hanging up causing the system restore service to restart or stop. Causing the restore points to possibly become corrupt and/or deleting themselves. I would also suggest reinstalling flash and adobe reader again.
2.) Try this link here, and re-download the volume shadow copy and the system restore service Services - Restore Default Services in Windows 7
3.) If all else fails, I suggest doing a Repair Install