The ability to restore from an image, depends on what the image is and which program was used to make it.
What is the Boot Disc Error that he gets? It may be possible to repair this by booting from the W7 Recovery disc which will give him a repair option.
Which program did he use to make the system image onto an Ext HDD?
What is the nature of the 'backups' you mention? (how made and by what program)
How many partitions are there on the HDD (with or without letters)?
When you say 'system image' do you mean a complete sector by sector image of the HDD or did he image just the C: partition
W7 has (unless he installed W7 himself onto an already made partition) a small 100mb system reserved boot partition (with no letter) which is placed on the HDD before the C: partition and there is probably a D: partition that W7 uses for backups.