Just a summary log no explanations. The tools below tested

To make a bootable xp CD

Bart's Preinstalled Environment BartPE bootable live windows CD/DVD. Slipstreamed Windows XP CD Using SP2

Bart's PE Builder helps you build a "BartPE" (Bart Preinstalled Environment) bootable Windows CD-Rom or DVD from the original Windows XP or Windows Server 2003 installation/setup CD, very suitable for PC maintenance tasks.

EASEUS Todo Backup is a FREE data backup software and disaster recovery solutions help you back up hard disk drive system, partitions, files.

Macrium Reflect FREE Edition - for personal use - The only free XP, Vista and Windows 7 compatible disk imaging software with BartPE and Linux based recovery options.

Get an external drive a USB type - I have a Seagate 500Gb Desktop Drive. There you make C: drive or system backup, it could be around 3.5 GB for a 'xp + drivers' image. It will take about 10 mts.

Keep at least 9 Latest images, the software also helps create a Bootable CD Linux or BartPE. This is used when the system crashes or the Harddisk fails, even a virus attack.

Note -

Try to install all new programs on D: or E: not on C:. This will keep your system image small. Use the built-in xp system restore regularly. Use these images ONLY when system restore fails or new HDD has to be put. System restore can be accessed on the command prompt. The restore files can be infected too, then image is the only option.   

If motherboard fails or you are changing the entire PC. Then this method can be used only to recover the data. It is better to install afresh in a new system. So keep Data in D: and backed up and copied into CD/DVD. Hardware/Driver clash may cause difficulty in  booting an old image on new PC Hardware. (similar to the problems of hibernation).

Also zips and iso images seem to be immune to virus, but not for long. So keep an extra backup of these images on a DVD or a Portable HDD or Tape Drive dedicated for Backups. Keep these drives/media unconnected / unnetworked to the System. Only used in Total System failure.

Backup/Mirror Software -

Cobian Backup 10 Version 10 Boletus For Windows XP, 2003, Vista, 2008, Windows 7 (works in both 32 and 64 bits Windows)

Toucan is a custom built portable app for advanced users to synchronize, backup and encrypt their data, wherever they are.

Also remember the default data storage in windows is like My Documents, My Pictures etc. ... These are in C: Drive which is for System only - C:\Documents and Settings\delabs. Flush out this data after a backup using Cobian into zips on CDROM.

 !! Also remember to mirror/copy CDROM and DVD every 10 Years. I am not aware of new tech data, but i faintly remember before Y2K CDROM life was 50 yrs and Flash Storage 1 Million Read/Writes. Now its 2010, rapid technology advances would have improved materials technologies. Still handle Media with care, Store in a cool/dry place. No chemical fumes, dust. fungus or roaches.

Keep it in ZipLock Covers in a Airtight Steel Safe, Buried 3 Meters under the Ground in a Elevated Flood Free Hillock. Two System Admins with Two unique keys for operating the safe. The VP Data-Security should have the password for a Electronic Safe within the Steel safe.

Silverfishes and Bookworms may still manage to get in such Data-Centers. These are friendly biodegraders, tolerate them, decorate them. They do not touch Plastic and Electronic-Media. They are good sign of Data Safety, they guard useful and relevant data.

This footer banter is the only incentive i get. got it. I was just talking to myself.