Windows Vista freezing on Acer Aspire 3050

I have an Acer Aspire 3050 with the following specs:

AMD Sempron 3500+, 1.8 GHz
80G HDD, SATA
2G Memory
Vista Basic OS

Today my wife went to use it and neither the mouse nor the keyboard was responding. The keyboard responds normally in BIOS.
After several resets and Safe Mode starts, I got a wireless mouse and tried it on the system. The mouse will move the cursor and will open some of the items on the desktop but they will not respond after that. I pulled the HDD and used an external enclosure to connect it to another computer to run an AV scan. I found 4 questionable files and removed them. After re-installing the drive it is still doing the same thing.
I used a Dell Vista Home Premium (I have two other laptops, both Dell) disk to bring up the repair panel. I was able to get System Restore to work through the repair panel, but the restoration failed.
I do not have the restore disks and the previous owner deleted the restoration partition.
Does anyone know of a fix for this short of purging the HDD and re-installing the OS?

You can try by system restore and restore to some point when that was working well. Try with this and let us know if this helps you to get this problem solved or not.