Normally I would suggest that you uninstall the printer, reboot and reinstall, but you have failed to tell us if this was a new printer or one that you used with a previous installation, or if you checked with the manufacture's web site for updated drivers etc.

Full details are always helpful

That's OK Mrich, when most of us ask a question we just assume that the other party knows all about our computer and what we have on it.

When you say that you were unable to uninstall the printers you may have overcome that problem if you had booted into Safe Mode and tried to uninstall from there. Surprised that System Restore didn't work though.

I have seen an AV Program wipe out half a system's files too.

I'm pleased the repair install worked for you as it doesn't a lot of times. Keep a close check on your system for any malwares as well

   You asked, "is there a simple way to restore the spooler function without doing a repair install?"
   I would suggest two things.  One is to keep daily backups of the registry.  WinRescue can do this for you (http://www.superwin.com/rescuexp.htm).  WinXP also keeps Restore Points but restoring them usually also uninstalls recently installed programs and sometimes deletes files that you didn't want deleted.  When you had that problem, you should have tried to restore to a backup made before you had the printer spool problem.
   If that did not solve the problem, I would have suggested reinstalling Windows to the same directory that it was in (so that it is an Update and not a new installation).  That will often fix problems with corrupted files without messing up your setup.

Why are you trying to restore the spooler function? Do you have a stuck print job? If so, the way to deal with this is to stop the spooler service and delete the spool files. OK, that sounds easy, but...

to stop the spooler service, do Start, Run and type services.msc. Hit enter and you will get the Services window. Find the service labelled Print Spooler, click on it, then click "Stop" (top left). You will need to restart it again later, so keep the window open.

Now navigate to C:\WINDOWS\system32\spool\PRINTERS. You will see two files for every print jon, one with a .SHD extension and one with a .SPL extension. Delete those files. DO NOT DO THIS UNLESS YOU ARE SURE THEY MATCH THE STUCK JOBS!!!

Now, restart the service.