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I've been advised a couple of times to use the "restore" function to fix problems. Would this affect software? For instance, if I "restored" to a point before I upgraded my genealogy software, would it go back to the old version? (using Windows XP Home, Dell Dimension 2400)
Yes it will affect the programs that are installed like they would either disappear or revert back to the version before the update. Any data that you do have however would not be affected so you would be safe there.