I use Acronis and I have tasks scheduled so that it creates a full image of my C: and D: drives and then incremental images after that. Presently it is set to make a full image, then incrementals every 3 days with a full image added after every six backups. All goes to my E: drive and an external USB drive too. Only needed it desperately once, but that was enough!
C: is my "System" drive, a Western-Digital 80 GB SATA with the OS - XP Pro SP2 - and my program installations only, and D: is my data drive, a Seagate 500 GB SATA containing MY Documents and several folders I use for various media files: Recorded video, TV, digital images, etc. And E: is another Seagate 500 GB SATA drive which I use only for various backups. (Acronis, photo database backups, and any critical files which I sync regularly from the other drives, Quicken data, etc.).
Works for me so far!
BTW, I DO feel your pain - lots of installations and the resulting conflicts to bite me on a regular basis. I really don't think it's going to get any better soon!