Note that I don't image my system. I don't care one iota about my system drive. I can reinstall Windows quick enough if the need arises.
All I'm backing up are my data files: stuff that I've created, and that would be truly irreplacable if it was lost. I do a daily incremental backup to an external hard drive, and a semi-regular one to a rotating set of DVD-RWs that I keep stored at the university. Then I also occasionally upload a compressed copy of just my subversion repositories to Skydrive.