To reset System Restore right click My Computer then click Properties then open the System Restore tab.
Here turn it off then turn it back on. This will remove all previous point but should reset the service for the future.
Most Microsoft software will not install if it detects a more recent version already installed. Updates make a more recent version. I am not sure if you can install Excell independent of Office. If you have the Office CD to reinstall you probably need to uninstall the current version.
Another possibility is to use this tool and see if you can delete any Office or Excell files in the Installer list:
Windows Installer CleanUp Utility