It should be noted that System Restore was never meant as drive recovery program. It is more of a Windows
configuration tracker - keeping track of registry edits and hardware driver changes. I have used System Restore dozens of times with great success. Not always, however. Generally, System Restore is best used to roll back very recent changes. For example, if you install a new security application or piece of hardware and it messes up your system. System Restore is great at taking your system back a day or two. But if you hard drive becomes corrupt, System Restore is not the tool to fix it.
See the Microsoft TechNet article,
FAQs Regarding System Restore in XP - in particular, scroll down to the answer to
"What is or is not restored on my computer when I use System Restore?"
I agree that Ghost is a popular imaging program. If, like me, Symantec is not one of your favorite companies,
Acronis True Image is another popular program. Both programs can save images to another drive (local [internal or external] or networked), partition, or optical disk(s). The advantage of using external drives or optical disks is you can store the disks offsite - necessary for fire, floods, or badguys hauling your computer away.
Personally, I use several methods of backup. My first line of defense is RAID1 - mirrored drives. I have two identical drives in a RAID array that act as a single drive. Everything saved to one is saved to the second automatically. If one drive fails, the system carries on without skipping a beat, or should I say bit. I get yelled at by the RAID monitoring program and all I have to do is remove the bad drive and slap in a new drive. They automatically sync up and I have an instant backup again. In fact, I periodically intentionally swap drives and keep the third off-site in my bank safety deposit box. Of course, is Mother Nature decides to take out my whole computer, I'm hosed - or least as far back as the time stamp of the drive at the bank. So I also keep backups of my critical data on networked drives.