I am having the exact same problem. Vista Home Premium.
In System Protection, it shows "Local Disk (C

System". The box which says
"Create restore points automatically on the selected disks" is checked.
In Scheduler, I see that the Task is triggered and completed on a regular
basis. but it only takes 20 seconds to complete. This seems too short of a
time.
In Services, I checked to see that Volume Shadow Copy was enabled and
automatic. It was running but set to "Manual", so I changed it to "Automatic"
and reooted.
If I run the command 'vssadmin list shadows', I only see two manual restore
points which I created.
This is the same result when I run "System Restore."