You might have confused between the options that you see on your back and recovery options on your windows and could not differentiate , you have options like Create a System Image, Create a System Repair Disk and Set Up a back up.
So here is the needed explanations so that you can identify the importance of each of the options.
What is windows system image ?
System Image is an exact copy of your drive which includes all your files, programs, drivers and system settings. It is useful in situations like when your PC ran into problems. System Image is a complete restoration of your operating system where all the present existing data is replaced by the system image data.
Note : System Image option will create exact copy of your present installation and when once you are trying to recover your present installation is wiped out to recover the previous installation.
What is System Repair Disk in windows ?
Repair disk can be used to boot your computer if your installation is corrupted and will have windows system recovery tools that can help you recover windows from the system image that you have created. This will be extremely useful when your windows corrupts and will not boot at all and as it cannot boot you have no option to recover your windows, However you can create system repair disk from other windows machine and use it to boot and select the windows image copy that you have saved on your hard drive to recover windows.
What is Back Up option in windows ?
Back up is an option to back up all the files and you have an option to select what needs to back up and what need not. It is important to back up all the system files and in addition you can select files on desktop and the system image that you have created etc in the options and schedule back up so that these files you have selected can be backed up.