Scotty, imaging isn't a good choice for most users. The image file, although compressed, will take several to many DVDs to hold it. You're better off just backing up your data files, mostly found in the My Documents (or Documents under Vista) folder hierarchy on a regular basis. Of course, the critical data files should also be backed up in an offline location, either via an online service as we're discussing in this topic, or physically somewhere other than home. System restore points will let you recover from a bad software or driver installation IF you detect it in time before the restore point gets overwritten. It's your data that's irreplaceable in the event of a total loss of the computer. You also need to safeguard the original install media for all your applications, whether on CD, DVD, or downloaded.
For most people, rebuilding a system from scratch is a days work. In my case, with hundreds of applications, it will take a week or more to restore from bare iron, so I image my system every night. But I don't recommend that for most others. Also, since I rely on my computer for my business, it's important that I get back up and operational as quickly as possible in the event of a total loss, thus the imaging.
All that said, imaging is the easiest way to backup, especially if it's scheduled to happen automatically, and if you're not disciplined enough to do the manual backups