This issue has occured on two different machines that I have, both running on Windows XP.

On my laptop I am unable to access the system restore function.

On my desktop I am unable to access the desktop properties function.

In both cases, whenever I click on the icon or file an hour glass appears as if the program is going to open, and then nothing happens.

What type of virus does this and how can I remove it?

I need to run a system restore on my laptop, is there another way to get to the system restore function without using the conventional path?

Not necessarily a virus or even malware.... Though there is plenty of malware that do what you describe.
I suggest following the steps in my "Malware Cleaning" linky below. They should give you an idea what you are dealing with.

Click START > RUN > type CMD and then type or copy&paste C:\windows\system32\restore\rstrui.exe and hit enter. If that doesn't work, chances are that something has altered your registry which is preventing this from running.

Best Luck
PP