System Restore is a Windows system rollback. It resets Windows and a majority of programs back to previous saved states, undoing any updates, new installations, and settings changes that have happened after the restore point was set. It doesn't, however, recover deleted data files or get rid of infection. Your data will be unaffected by a Windows System Restore.
System Recovery is usually what the manufacturer calls their built-in tool to reset the entire computer to factory default. If your computer came with restore or recovery disks then they accomplish the same thing. All data on the system is wiped and only what came on the system originally is reinstalled, courtesy of the recovery disks. All your data, added programs, and ideally virus infections are removed, and the system is just like it was when you bought it.
If your system uses a recovery partition (a separate chuck of the hard drive used to store the recovery data) then virus infections might not necessarily be taken care of. A recovery partition is susceptible to virus infection just like the rest of your hard drive, meaning if it becomes infected it can and usually will reinfect your system when you do a full system recovery.
