You can't really do what you want with the operating system alone though you
can use the File and Settings Transfer Wizard to back up your user profile
settings and files. Go to programs/accessories/system tools to find FSTW.
What you seem to want is a third party imaging program if you also want to
be able to restore the operating system and applications. Ghost is great and
it comes with some versions of Norton Systemworks. There may be free
alternatives though I can not recommend one but maybe someone else can. A
Ghost image of the system partition however may not be able to be restored
on any computer because of differences of hardware so you would want to keep
separate backups of your files/settings. You can however extract specific
folders from a Ghost Image onto any computer running XP Pro, etc if you
install Ghost on that computer.
I personally use Ghost and I can reinstall my operating system and all
applications in under five minutes from my image. After that I need to spend
a few minutes making sure that my operating system is current with critical
updates, update my virus definitions, and restore my current data. Make sure
you keep track of any password changes because an image of the operating
system will use the passwords in effect at the time of the image and ALWAYS
backup your EFS private key if you use EFS encryption and keep clear text
backups of encrypted files on secured media.
Steve