Windows 7 provides the same backup features in all versions (I believe). It uses VSS to produce consistent images (for image backups) and can write those images to CDs, DVDs, Hard disks and network folders and produces a bootable rescue CD to restore images. Compression seems reasonable. Maybe I will be brave and try a restore!
File backup is pretty basic - but it makes sensible automatic selections of folders to backup and again uses VSS to get consistent file sets. Best bit is it can be scheduled and it has a cleanup tool to free up space from old backups.
You can only recover individual files/folders from file backups - image files can only be restored in their entirety.
I presume the image backup system works - it says it has completed a full backup - and interestingly if you have a multipartition system you can create multi partition images and choose what to restore in recovery.
OK it is very basic but for most people it will do the job and at least they haven't restricted it to Business and Ultimate like they did in Vista.
As someone who builds and sets up systems for clients I think it is going to be a really useful way to produce quick and easy images of systems for quick recovery. And it doesn't cost anything!
For me as windows 7 becomes more prevalent I will be pointing users towards Windows Backup as it is very easy to use and manage and it is already there. Let's hope there are no gremlins in the system and that they maintain some form of forward compatibility in windows 8 etc. (one of the bugbears of Windows Backup in earlier windows editions).
Personally I am using Acronis Backup & Recovery 10 (the new corporate version) or at least I am trying to. Acronis seem to have a death wish as they have released a corporate version that is chock full of bugs! They claim it is Windows 7 compatible (and Vista) but both systems have a UAC prompt during startup because Acronis haven't yet worked out how to program in Admin mode without UAC complaining! Their suggestion is 'turn UAC off' !! Having said that it is the least of their worries, the last version they released caused BSODs on many machines, they replaced it with a version that cured BSODs but can't use VSS on Windows XP to create consistent images. All in all a dogs breakfast. Trouble is TrueImage Echo Workstation doesn't apparently work with Windows 7 (not that I have tried it) so corporate users have no choice but to upgrade to B&R10 if they want to use Win7.
DriveImageXML is free for home use and now supports XP, Vista and 7 and can also be added to a Win PE boot CD to allow backups of other versions (e.g. 98 and 2000). Partition handling is still a bit clunky and it seems a bit geeky for the average user.