Restore Point – is a system utility in Microsoft Windows which allows the user to roll their computer’s state (which includes system files, installed applications, the registry, and system settings) back to those of a certain point in time, which can be used to recover from system malfunctions or other problems. First included in Windows ME, it has since been included in all following desktop versions of Windows released since, excluding the Windows Server
In prior Windows versions it was based on a file filter that watched changes for a certain set of file extensions, and then copied files before they were overwritten. An updated version of System Restore introduced by Windows Vista uses the Shadow Copy service as a backend (allowing block-level changes in files located in any directory on the volume to be monitored and backed up regardless of their location.) and allows System Restore to be used from the Windows Recovery Environment in case the Windows installation no longer boots at all.
Source: Wikipedia