An excellent suggestion Mac. Can I take this one step further? If you have it, a ghost utility is another option (e.g. Norton Ghost, or similar). This is best utilised if you have a spare hard drive/partition to use for a backup. The main advantage of using a ghost utility is that it will map the boot sector/boot strap for the drive too, so if it is your C drive, you won't encounter any problems with it detecting the operating system when it comes to using your backup.
That said, Mac's suggestion is probably the best solution if you don't have a spare drive handy or you don't need to backup the entire C drive.