is virus will still exist after doing a restore point??

"system restore" to a point prior to infection is a good thing to do. But do it from within "recovery environment" (boot from DVD) because otherwise the virus is running and can do anything he wants. For example disable system restore or do a fake system restore.

system restore restores all dll's, exe, registry etc. All system related stuff will be restored.
But only win7 related stuff! Not the master boot record for example. But if you boot (from DVD) into recovery environment->command prompt

bootrec/fixboot
bootrec/fixmbr

MBR will be refreshed.

Can someone explain what kind of virus survives this kind of fix?

malware can hide anywhere. malware likes any folder entitled temp. Malware will hide in any executable, in doc files, in scripts, and the list goes on.