Sooo...you had a rootkit infection which you think you have neutralized within the last 24 hours...yet your problems developed circa the same time that you first realized the system was infected?
I'm not very smart...but I'd say one of two things has taken place:
A. Your system is still infected.
B. You have extensive damage to your O/S by virtue of the malware or your removal efforts.
If A is even close to being true, then you should follow Steps 6-9 at Preparation Guide, Before Using Malware Removal Tools and Requesting Help - http://www.bleepingcomputer.com/forums/topic34773.html
and post the requested logs and narrative in the forum where the Prep Guide is listed. Malware log topics are not to be posted in this forum.
If B is trodding the correct path...your best bet would probably be to run the sfc scannow command.
How To Use Sfc.exe To Repair System Files - http://www.bleepingcomputer.com/forums/topic43051.html
Those are my best guesses...others here may have better ideas of what's transpired and how to overcome.
The questions re safe mode and last known good...are just basic options available to users to try to overcome/assess possible causes of system problems. If a system runs fine in safe mode, but exhibits problems in normal mode...there's a good chance that the problems lie with startups or drivers or malware, IMO. Since you seem to have no problem booting, last known good isn't very useful.
It's also possible that you have hardware issues...system overheating or failing hardware. Either can cripple a system. But...since malware is the logical suspect that I would pursue, I focus on that.
System Restore is better than nothing...but I've read that it can be unreliable. I don't use it, preferring backups made periodically.