There are multiple ways to backup Windows, if you will be reinstalling to the same machine, the exact same version, Dell / HP preinstall, Windows Vista Home, Windows 7 Professional 64bit, etc then Windows Easy Transfer can be a huge timesaver.
The backup utility that shipped with Windows XP actually is quite effective. Of course as with any backup program we want to make sure you select the correct data and are planning on reinstalling the same version of XP back on the the machine. The tool for this job is NT Backup simply run ntbackup.exe and follow through the advanced options to select the files and destination. Compression is not needed and will only slow you down.
NT Backup http://support.microsoft.com/kb/308422
Windows Easy Transfer – Vista and Above:
The simplest way to transfer from the same version of Windows to a reinstall is to run migwiz.exe, also known as windows easy transfer. While this tool works for backing up the user profile, settings, documents etc you will have to select any additional folders or directories that might need to be saved. Be aware by default if you select USB storage it will try to backup to the C:\ drive so make sure you select your external device. If you are migrating from machine to a new machine make sure you are using the latest version of migwiz.exe. For example you can create a Windows Easy Transfer from a Windows 7 machine to backup a Vista machine, but you can then only restore that data to a Windows 7 machine of the same version, Home, Premium, Professional etc. Be careful as this tool is very simple it can bite you. During the process the tool will ask you if you would like to password protect your backup. We highly recommend you set a password and enter it into the customer information. The reason for this is if for some reason you removed the password or the customer removed the password before bringing it in, on some machines the backup keeps a copy of the SAM database and requires an old password to restore the data. Always set a password when using this tool. If you forget to set a password there is an extraction utility called MigRecover that will extract the data but not the profile itself. There are a few extraction tools out there as well but none that I’ve found at this time that provides a true answer.
Once you have made your backup verify that it is there, then remove the external drive and set it aside. You don’t want to accidently format over it. You can now move onto reinstalling windows.
Windows Easy Transfer Latest Versions for Migration: