System Restore uses a first in/first out (FIFO) storage scheme: The utility purges old archives to make room for new ones when the data store reaches a set limit.
The file types that System Restore monitors are many but include most of the extensions that you typically see when you install new software (e.g., .cat, .com, .dll, .exe, .inf, .ini, .msi, .ole, .sys). Note that only application installations that use a System Restore restorept.api-compliant installer will trigger the creation of a restore point.