Backup Windows OS - Windows System Restore and Third Party Disk Imaging
The best method to backup Windows OS is to use software that knows which files are to be copied so that you can restore Windows OS when required. There are two options to back up Windows OS. The first is the well-known System Restore process. This VSS (Volume Shadow Service) based program creates a snapshot of your current Windows settings: the boot sector on the HDD, the Windows registry, and other files required to run Windows properly. It even takes care of your My Documents folder. The System Restore will back up only Windows OS and programs. It will not backup or restore your data. The main problem with System Restore is that it saves Windows OS backups on same drive. In case of HDD crash or corrupt OS, you cannot access this process and hence, cannot restore your system. This means that you need a separate program to backup Windows OS to recover from HDD crashes.
There are several third party applications that help you back up Windows OS. Most of them also offer you the option to backup data. One such program is Acronis True Image - available for both home and office use. This software offers HDD imaging and creates an exact image of your HDD: Windows OS and data. As the backup is stored on a separate place, you can always restore Windows even if your entire Windows registry goes corrupt. Acronis True Image can also be used on a regular basis for incremental backup of Windows.
If you do not wish to spend money (Acronis comes at a cost), you can still use Macrium's Reflect to backup Windows OS. Reflect is again VSS based software that helps you backup and restore Windows operating system. The compression of Reflect is good and thus, you can backup Windows to even a smaller size disk. Again, you have the option to backup only the data, only Windows, or both.
IMPORTANT: If you are using a third party tool to backup Windows OS, make sure you use the imaging option for the system drive and the partition containing Windows installation (if you have dual boot).