Unless you just want to back up some specific files, you would normally do a full system backup, and for a few reasons:

• A regular file backup program can't copy certain system files because they're 'in use', which means you're not making a backup of the entire system.  An image file backup program doesn't look at the system as 'files', but simply looks at hard drive sectors and dutifully copies them to one big file.
   
• We are in the day & age of 'smart' malware programs that can actually keep you from installing anti-malware programs so you can get rid of it.
   
• Similarly, we're also moving away from a time when certain files were considered 'safe', such as PDF and video clips.  And, again, if they contain a 'smart' virus, your system is cooked.

Unless you've made a backup image file, of course.

I use a commercial program called True Image.  It allows more flexibility than the stock Windows program and offers some extra tools.  I have a site dedicated to it here. 

If you want to give the Windows Restore program a spin, open Control Panel, 'Backup and Restore'.  You'll need an emergency boot-up disc to restore the system in case Windows doesn't boot up, so first click on 'Create a system repair disc'.  Insert a blank disc in the burner and click 'Create disc'.

After it's burned, restart the system and make sure you can boot up from the disc.  You'll usually see a 'Press any key…' notification at the top of the screen.  If you don't, the BIOS needs to be adjusted.

To create a backup image file:

• Click on 'Create a system image'.
   
• On the first panel, pick a drive to store the large image file.  It'll (obviously) have to be a different drive than the system C Drive.  You can also burn the image file to DVD with the second option.
   
• On the next panel, the system drive will be checked by default.  You can also back up other partitions.
   
• Start the backup process.  It might take a while since system drives can be fairly hefty.

You'll notice that Windows rudely decides where to put the backup files on its own.  This is so the emergency boot-up disc can find them without needing to rely on the hapless (and usually panicked at the time) user to dig them up.

To restore the system, boot from the disc:

• Select the default keyboard.
   
• Select the second option.  It'll install the most recent image file by default.  If you want an older image file, select the other option.
   
• Next, Next, write the file.

Note that you'll lose whatever email, bookmarks, etc, added to the system since the last backup file was made.  If you put a little effort into it, the system can be configured so you don't lose a thing.  The info's on the above link.