(Compliments of Noel Patton MS-MVP)

Boot to DOS using your Startup floppy.
At the A:\> prompt, type the following commands

SMARTDRV
DELTREE C:\_RESTORE

Answer "Y" to the confirm prompt, and then go and have a few drinks - it'll take possibly 2-3hrs to delete all those files, depending on the speed of your system.
When the system is back at the A:\> prompt, you can then take the floppy out of the drive, and reboot to Windows.

This should create a single, new System Restore point.