If You're Using the Win7 "System Image Disc" Option...
...you'll be creating a fully operational Windows 7 computer image.. Just like if you used any other "ghosting/imaging" software available on the market.. The "System Image Disc" on Win7 is much the same as other imaging software and can be used to reinstall the image on a new hard drive, should it be necessary. Since you've installed Windows 7 over the top of Vista, the current, running version is Windows 7.. A newly created System Image disc will make a backup as it CURRENTLY exists on the hard drive and should install the operating system and software likewise when you need it. It doesn't take you back to the original state of the computer from the factory.
Hope this helps.
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