When it comes to backup, I make it easy with my laptop. All my data files (Documents, Emails, PowerPoints, SourceCode, Music, Photos etc.) are stored on a separate partition (It has grown into a compulsion for me over the years to ensure this partition is always D-Drive (D:\) and name it Data). So I normally XCopy (or Robocopy) the entire D-Drive to my external USB Drive or to my Office Network Share periodically.
But when it comes to the OS Partitions, it is not so easy. You cannot simply copy the OS partition files, you need to do what is called as “Imaging” or “Ghosting”. When you take an image of a partition or an entire hard-drive, a copy of it (sector by sector) is written into an image file, which you can restore back to get your partition/HDD back exactly as it was before. Though writing a program to do this is not technically so difficult especially if you can boot into DOS and you are able to write decent C & DOS Interrupt programs, but most of the commercial products in the name of simpler UI and running from within Windows GUI have made it very complex and pricey.
Anyways for several years, the only popular product to do this was Norton Ghost (still available) – the number of machines/OS setup that Ghost has saved for me is not small. Nowadays, I prefer Acronis True Image. I recently bought a copy of their Home Edition and tried it on my laptop, it took less than 20 minutes to backup my C-Drive (Windows XP 20GB – 11GB used space) to my external USB Seagate 100GB drive. It did pretty a good compression to get the image file size down to about 5.68 GB.
If you are new to imaging check this Audio Visual Introduction at Acronis website to learn more about Disk Imaging.