The error code shown in the screenshot is exception code 0xc0000022 = STATUS_ACCESS_DENIED
System Restore has been denied access to the restore point(s).
Do you have a 3rd party firewall installed, e.g., NIS, N360, KIS, McAfee, Zone Alarm, COMODO, etc...? If so, remove it using the product manudfacturer's removal tool, if available. Reboot upon completion. Install MSE
Boot into Recovery using your Windows 7 DVD or via the HDD recovery partition and run System Restore from there. The recovery environment runs under the supreme user NT AUTHORITY\SYSTEM and should be able to bypass software restrictions.