I know that some viruses/malware will hide in the system restore files as it's a location that's inaccessable to many AV applications.
That's true. But a better way to deal with that (IMHO) is to move the "System Volume Information" directory branch to another directory (again, another thing you must do using either another Windows installation on a different partition (and after adjusting ownership and permissions), or while booted under Linux). This is something I do after every cleanup anyway, because while you can clean up the live installation you can't clean up the compressed backups of the the critical files made by System Restore ( or at least, I don't know how). And if you don't , the user of system could do a System Restore back to an infected state. I suppose you could do this early on in the process and it would clean up an infection that was located solely in the System Restore directory structure, but most infections these days infect a number of different areas, and if it's somewhere else, it's going to be recreated by the infection process at the next boot (or more usually these days, at the next event timer tick).
My usual method is to do nothing to the file structure until I've identified every startup hook the infection has made, and then suspended via ProcessExplorer (when working though Windows) every thread associated with it ( or these days, rebooted into Linux where I can be sure it's not running) before I start removing/repairing files.
The problem I see with clearing system restore is that it's an all or nothing gambit, in the sense that
a) the systems I clean up for folks are rarely backed up at all, and never in a way that contains a usable system state
b) the only copy of a good registry hive I will have to work with is going to be those I find from System Restore
Of course, if you aren't going to go the next level of trying to repair the registry from files contained in System Restore, then you have nothing to lose by doing so, and as you've said, in some instances, it will help clear the infection.
Again, all just my humble opinion.
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