I want to run Backtrack 5 on top of my Windows installation using VMware player. I believe that effectively partitions my hard drive and installs Linux on my hard drive? I was wondering if I did that would I still be able to restore my system to factory settings? Or do I have to make a back up of my operating system?
VMWare will create a virtual hard disk which will show up as a single (or multiple) files. You don't need to format your hard disk at all, and nothing is changed. You can simple delete the file and all remnants are gone.
Note that Virtualization will not give you hardware access (unless you use VT-D/IOMMU on supported hardware and a supported OS), so things like packet injection won't work in Backtrack when virtualized.