The default installation folder for Windows XP is C:\WINDOWS.
The default installation folder for Windows versions before XP is C:\WINNT.
These can be changed when the product is installed based on the preferences and reasons known only to the installer. You said a tech renamed the folder and must have had some reason for doing do. Maybe the tech installed XP on a system that already had Windows 2000 - who knows, but I digress...
Lets make sure what you have exactly. On your Desktop, right click My Computer, Properties. Under the System information on my system I see:
Microsoft Windows XP
Service Pack 3
What does yours say?
What are the highlights of the labeling on your XP installation CD?
You found the INF folder which is good now that we are looking in the right place.
If I saw the message you are seeing, I would go through the reinstall steps using the sr.inf file I mentioned (don't do it yet).
If you do the sr.inf reinstall, all Restore Points but the current one will be removed. Since it is already broken, that may not be a problem.
You said you uninstalled a bunch of programs to get more space (and did), but there is no good reason to do a System Restore after that.
Your System Restore is broken and needs to be fixed, but it will not help you recover space as some sort of a final "clean up" step after removing programs. There is no need to use SR after uninstalling unused programs. There are reasons to run SR, but that isn't one of them. It is important to understand that.
It seems I say this at least once a day to somebody: System Restore is not a time machine and it is not a magic wand you can just tap on your computer when things go wrong.
SR is sometimes the first thing people think they need to do when things go wrong. To me, it is pretty close to the last thing to do to try to solve a problem. Personally, I have never used a Restore Point for anything (yet)
So your listed problems are:
Two address bars:
I am not sure what that means. Is that in your Web Browser (Internet Explorer, Firefox) or do you mean the taskbar usually located at the bottom of your screen? There is a way to post screenshots here, but I don't know how. That is often very helpful to see what you are seeing. Maybe Stang777 or boopme can tell us how to do that.
Internet is hanging badly:
"Slow Internet" and "My Internet is not as fast as I think it should be" are very subjective. That is different than, it used to be pretty fast and now for some reason it is very slow and sometimes has problems.
Can you think back to when it was okay and what happened between then and now? What was installed?
This is one of those things where a System Restore will not help you with (see above).
You said you have ZoneAlarm so that is the first thing I would look at. Do you think this started happening after ZA was installed? Why did you install ZA? It may need some adjustments.
You can still get on the Internet and download, so that is really very encouraging.
You said you ran MBAM (malwarebytes), so that means you downloaded it, updated it with current definitions (right?) and ran a scan, so as long as you let it fix everything and it runs without complaining afterwards, that is also good. MBAM is a respected scanning tool.
Sometimes scanning softwares will remove the malware, but some things need to be fixed by hand afterwards.
Hang on to your HijackThis log and don't post it yet. I'll bet is very interesting but those logs go in another place here and I am not the person(s) to look at it. Let's get the other info first.
Maybe Stang777 and boopme have some other ideas, so feel free to jump in!