discrepancy in partition 'nomenclature' in disk mgt & sys restore

(please move this thread to the appropriate forum if it fits better elsewhere!)

I'm trying to get my mother's new HP laptop (G62-225DX - Windows Home Premium 64-bit) set up the way I want it, and I was having trouble getting System Restore to work - which led me to check out the situation in Disk Management... and now I'm really confused.

The laptop came with 4 primary partitions; I used third-party software to change two of them to logical partitions so that I could create additional partitions for my mom's data and her backups (by shrinking the original C: partition).

If I go in Disk Management now, this is what shows up on Disk 0:
SYSTEM [ Healthy (System, Active, Primary Partition) NTFS 199 MB ]
(C: ) [ Healthy (Boot, Page File, Crash Dump, Primary Partition) NTFS 61.02 GB ]
My Documents (H: ) [Healthy (Logical Drive) NTFS 61.05 GB ]
Backups (I: ) [ Healthy (Logical Drive) NTFS 161.76 GB ]
RECOVERY (D: ) [ Healthy (Logical Drive) 13.96 GB ]
HP_TOOLS (E: ) [ Healthy (Logical Drive) 103 MB ]
*notice that the SYSTEM partition has no drive letter assigned to it

(I know I shouldn't have backups on the same HD, but until she gets an external HD, it's the best I can do.)

When I initially tried to create a System Restore point, under Protection Settings the Available Drives were listed as:
My Documents (H: )
Backups (I: )
RECOVERY (D: )
Local Disk (C: ) (System)
(C: ) (Missing)

So it looked like there were 2 C: drives?
When I tried to turn System Restore on or off on any of the partitions, I got the following error message:

There was an unexpected error in the property page:
The filename, directory name, or volume label syntax is incorrect. (0x8007007B)
Please close the property page and try again.​

After rebooting the computer, the (C: ) (Missing) is no longer listed, and I've been able to turn on System Restore Protection for the C: drive.

But I read somewhere this evening that the System partition shouldn't be included in System Restore - and now I'm wondering if it's significant that (System) shows up under Local Disk (C: ) in the System Restore screen, but with no drive letter at all in Disk Management.

Have I royally messed things up here somehow? I created a test Restore Point, and it appears to have worked - but should I be worried about that SYSTEM bit being included there?