W7 can do it. Start Run Backup and Restore.
Create System image (Top left). Also make a repair CD/DVD.
With a new, empty'ish install, you can Image back to a set of a few DVDs. Doing it to external USB hard drive or a 2nd Internal is more usual.
An external folder caled 'WindowsImageBackup' is made and will be overwritten on next Image. So rename it or move it first.
Personally I prefer a 3rd party tool such as Easeus ToDo Backup. This gives you more control and features when you get familiar with images. It's not that complicated really.