Yes you are broadly correct. IMO (and many others here) Acronis TI 11 is the way to go...Not free, but the best.
I use it to create complete clones of my systems...Operating systems, everything.
I use an external and an internal for extra protection.
The above is the UK site. If you want to save a few quid, and have a credit card that is accepted you can buy it from the US site and burn backup copies.