Are you trying to make a backup of the whole system or just of your files? If your files, you can just burn the My Documents, Favorites and Desktop folders to disk.
If you want to make an image, you would want to use an external hard drive along with a program like Clonezilla to make a 1:1 image of your computer. Then you can restore the whole thing in one go, XP, your programs, your files, settings, etc...