Creating Disk Images
This article is part of Windows Vista Backup Strategies For Home Users

There is only one truly reliable way to backup Vista and that is with a disk image. A disk image is a bit-by-bit exact copy of a hard drive or partition. All information is retained including the files placement/layout on the disk. A disk image is saved as an archive. Images created by Windows Complete Backup and Restore cannot be mounted and explored. It also doesn't do other Operating Systems for you dual or multi-booters.

Disk Image defined at Wikipedia.

Vista's Windows Complete PC Backup And Restore

This section does not apply to Vista Home Basic or Vista Home Premium.

Vista Ultimate, Business, and Enterprise include a disk imaging program. It is to be frank, about time they included this ability. To be equally as frank it isn't nearly as good as Acronis True Image. It is more complicated to restore an image, lacks decent compression (backups are very big files), and I've found that it is slower to both backup and restore. In addition you cannot access (mount and read) the images to retrieve files from it. It's only advantage is it is 'free' (sometimes you get what you pay for).

To access Windows Complete Backup And Restore open Control Panel (Start > Settings > Control Panel). In the standard view click on the System and Maintenance button and then click Backup and Restore Center. From the classic view you can just choose Backup and Restore Center.  Now click on the Back up computer button.

Choose your location. This can be a second drive (internal or external), a network location, or DVD (unless you've got a Blu-ray disc recorder forget this option as the backups are very big). Click Next and follow the next few screens.

Restoring A Windows Complete Backup And Restore Image (more info from Microsoft)

You'll need to boot the computer from the Vista Installation Disk > Choose Repair Your Computer > the choose Windows Complete PC Restore. If a backup image cannot be found you may need to load drivers at startup.