Here is a page that explains the backup option.
Win 7 also gives you the option of creating a system image- like you get with an OEM machine- which allows you to restore your system in the event of a drive failure or a borking of Windows. Better, is that the image you create is not just a "factory" image- but is a custom one that includes everything you have installed at that moment. It's a nice touch- not as great as something like Acronis or Ghost (as you cannot browse the files in this image- it must be restored in it's entirety), but nice none-the-less.
answered Sep 20 '11 at 21:28