I prefer to use Norton Ghost, which guarantees me the ability to reconstruct my primary partition (C: drive), in the event of a system failure or software corruption.
I have tested the backup process of DriveImage XML, a freeware application; however, I have not tested its restoration functionality, so I am hesitant to recommend in lieu of Norton Ghost, which I have used to restore hundreds of failed systems. If anyone has a backup Windows XP computer and the time to test DriveImage XML, I would like a disinterested review. Most of the reviews that I have read of the product are positive; however, I prefer to know the tester, before I trust his or her judgment.
If your computer has only one partition (C: drive) on its internal hard disk, it is a simple matter to use Norton Ghost (and DriveImage XML) to place the backup images on the USB-connected hard disk. You do not need to go through the process of repartitioning your internal hard disk, as I do to my systems.