the system image can be restored to make a system work after a major software or partition or even a hard disk disaster, but restores everything on your system, windows install, games, registry entries, viruses, everything, all that composes the target drive that usually is c:\ partition
the target backup for example, just saves your my documents folder, or your user folder, whatever you wish to backup
on some circumstances a full system backup is great to recover form a disaster but is usually done when the system is new, install is clean and will require updates to be applied again, so it is not ideal for some situations but for others is great, however when you do hardware changes it might not work
what most people usually needs is my documents, desktop, images, music and downloads backup
some people do like to make a full copy of their user folder, in the user folder is located appdata, it stores all the config of the apps you use daily, including bookmarks of your web browser, so some would like to keep a backup of that