I don't think I'd restore, simply install the programs you need.
To burn:
Nero 9 Lite is a free program that works fairly well. There are other free programs like cdburnerxp and more that you can Google and try.
Video playback:
Go to add/remove programs, look for anything that looks like K-Lite or Codecs and remove them. Now, go to www.free-codecs.com and get the K-Lite Codec Pack Standard and Install it.
You can use the included MPC-HC program or Windows Media Player (it uses the codecs as well from K-Lite).
VLC Player when installed is defaulted to use its own included codecs so I like to have it installed in case of a problem.
There is a utility in Windows to change what programs do certain media things like what to do when a DVD is inserted (Nothing, Play, Open Folder... ). "Default Programs" in Windows 7.
If you have a newer video card you can use hardware decoding after installing K-Lite and using MPC-HC (DXVA). HD3xxx, 4xxx, 5xxx. NVidia 8xxx etc. You can Google for more info. ("DXVA mpc-hc")