I use Ghost when I image my computer, works well and the new version allows you to browse the image file once you have created it. I tend to create an image just before i rebuild for all those little bit you forget to back up (forgot my pst files last week).
Ghost will ask you when you are creating the image if you would like to create recovery disks. These will either boot you Cd or external hard disk and restore the image.
As for the size of the image - it does have compression but really it depends how much space you are using. for example last week I imaged my laptop, 12Gb on hdd, it made 5 2Gb files so the is a little compression but not a lot. A CD will however get the OS and all drivers on it.

Hope this helps