The best thing about Windows 7, in my opinion, is it’s awesome backup feature. Older versions of Windows had the ability to back up your documents, photos and stuff, but it was a pain to restore these. Plus, it doesn’t do anything for your programs, system settings and system files.
Microsoft calls this special backup method a “System Image“, because it’s like taking a snap-shot of your computer’s hard-drive, at that moment in time. So because it’s capturing the entire hard-drive, you need to ‘save’ this image onto a separate device, like an external USB hard-drive. These are normally pretty cheap, and well worth it; should your computer get a bad virus, or your hard-drive dies, you can restore your computer to exactly the way it was when you took the system snapshot.
I recommend creating a system image every time you make significant changes to your computer, for example if you’ve run a bunch of updates, or installed new programs recently. You shouldn’t need to do this more than 2x per year, though. If you have files that need to be backed up more frequently, there are automatic back-up options available for that as well.
Here’s an article by Microsoft on how to create a system image, and even a walk-through video!