Hi, lkenshin23. First, congrats on getting the upgrade to SP2. That will go a long way to helping to protect your system.
As to the findings by Window's Live Safety Center, first of all, keep in mind that it is Beta software. As SpyDie says, Beta. Software undergoes beta testing shortly before it's released. Beta is Latin for 'still doesn't work.'
In this case, however, it has detected the locked/encrypted file from KillBox. Not to worry, that is one of the files removed on a previous cleanup and cannot "get loose". You can remove it if you wish.
The other findings are in System Restore. No outside program can empty that, it must be done by you. Please follow the directions below to clear system restore:
Windows XP
1. Click Start, and then right-click My Computer.
2. Click Properties.
3. Click the System Restore tab.
4. Check Turn off System Restore.
5. Click Apply, and then click OK.
6. Restart the computer.
7. Repeat steps 1 through 6, except in step 4, uncheck Turn Off System Restore.
Then after you do this, please create a new restore point:
Got to Start>All Programs>Accessories>System Tools>System Restore. On the next page that comes up you will have three choices, choose Create Restore Point. Then click next type in a description "after cleanup" or something like that. Then choose "Create" then close.