Windows XP Home edition all the latest updates and service packs
2.00 GIGAHERTZ AMD Athlon 64
100.02 Gigabytes USABLE Hard Drive Capacity
52.51 Gigabytes Hard Drive Free Space

HL-DT-ST DVD-RW GWA-4082N [CD-ROM drive]

FUJITSU MHU2100AT [Hard drive] (100.03 GB) -- drive 0, s/n NQ07T592H764, rev 00000008, SMART Status: Healthy
Ram 1 GIG
Slot 'JP11' has 512 MB
Slot 'JP30' has 512 MB

My registry changed and I cannot think of anything that I did to change it.

Registry entry "HKEY_LOCAL_MACHINE\System\CurrentControlSet\Services\sr\ImagePath" (system32\DRIVERS\sr.sys) :

Entry was changed to <\SystemRoot\system32\DRIVERS\sr.sys&GT;

Should this be regarded as suspicious? I am not sure just what changed and what occurred here.
sluggo123
Yes, it should be regarded as supsicious. You may have the KurtAgent 1.0 Trojan (Trojan-PSW.Win32.Kurgent.10), which among other things, stealthily disables your System restore.

Read here

http://www.megasecurity.org/trojans/k/kurtagent/Kurtagent1.0.html

Check for these...

dropped files:
c:\WINDOWS\system32\directx32.exe Size: 448,506 bytes
c:\WINDOWS\system32\dxdlg.dat Size: 2,927 bytes
c:\WINDOWS\system32\dxdlg.dll Size: 96,256 bytes
c:\WINDOWS\system32\ka_keyg.dat Size: 0 bytes

deleted:
c:\WINDOWS\system32\Restore\MachineGuid.txt

added to registry:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Run "DirectX PLUGIN"
data: C:\WINDOWS\System32\directx32.exe

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SystemRestore "DisableSR"
old data: 00, 00, 00, 00
new data: 01, 00, 00, 00

HKEY_LOCAL_MACHINE\SYSTEM\ControlSet001\Services\sr "ImagePath"
old data: System32\DRIVERS\sr.sys
new data: \SystemRoot\System32\DRIVERS\sr.sys

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\sr "ImagePath"
old data: System32\DRIVERS\sr.sys
new data: \SystemRoot\System32\DRIVERS\sr.sys
Download HijackThis - http://majorgeeks.com/Trend_Micro_HijackThis_d5554.html
Post its log at "Computer Viruses and Spyware"found an online virus checker, found the virus and cleared the problem. Thanks for your input. It as a virus, fact two viruses hanging out in the system restore area. Thanks again. Problem resolved.
sluggo123If you list your current protection package maybe we can make some suggestions...
My current protection is:
Avast Free
A Squared Free
AVG Anti Root Kit Free
LavaSoft SE Personal
SpyBot search and destroy
ZoneAlarmQuote

Problem resolved

My current protection is:
Avast Free
A Squared Free
AVG Anti Root Kit Free
LavaSoft SE Personal
SpyBot search and destroy
ZoneAlarm