Restore = disaster.

[dnanian]

Well, given this narrative, it certainly sounds like your system was in a bad state when you did your last backup, and you hadn't noticed because you hadn't restarted. This corrupted your backup (since it was copying the state of the files on the drive), and then—when you tried to restart from the internal—you finally read the files that were messed up there.

Similarly, you had damaged Time Machine backups, and installed the OS fresh, which fixed them. It likely would have fixed your internal and your backup, too... but alas you didn't try that, so we can't be sure. But what I would have suggested, had you contacted me, was clean installing Snow Leopard to the internal, then pointing at the backup so it'd bring in the non-OS files, which should have worked fine.