Now that's awesome. Acronis here I come. Which Acronis program are you doing this with? I went to their site and it's a little confusing as to which application does what. What's sad is Microsoft could and should have this ability, but I guess they want us to keep buying computers. Microsoft hides the system restore files from us so we can't save a shell, do a remote backup with them, etc.
If you do a full image backup (as opposed to backing up select files/directories) then everything is backed up - even files that are locked/in-use like your Outlook PST file. In case of needing to do a full restore - you would boot the Acronis CD and point it to the Acronis backup file (which is a proprietary format, not ISO) and then tell it where you want to restore the image to and then it will do the rest. I'm using Acronis True Image Workstation 9.1, looks like there is a more recent version out now, I think you would want to use Acronis True Image Home 2010.
Not quite. If your HDD fails and you replace it... then 1. Boot from Acronis recovery CD 2. "Restore Image" by selecting a file (from external HDD) which is your previously created image. Acronis uncompresses that file and restores everything onto the HDD, bit by bit If you have used Acronis to make a "clone", all you have to do is plug it in and boot.