I also would not rely on system restore to get me out of a bind. I have seen it work, but more often seen it not work in resolving problems.
That being said, have you ever tried restoring your full registry backup? Do you know how?
A backup method is of no use unless you can validate the restore process. Unless you've tested various restore scenarios, you won't
know what you are protected against, what your options are, and if they will work.
There are few methods that I would suggest:
1) Full disk backup or image as suggested above ( I use Ghost, since I can also open the backup and do file restores)
2) Full data only backup
3) Data backup with incrementals. (Usually doing a full data backup periodically, ie. weekly full, with incrementals daily)
4) A hybrid approach of the above 3 methods.
The difference in the the above approaches is also in the restoral process. Which methods you use depends on how much time and media you
have to devote to the backup process and trade offs with how long the restore will take.
Approach 1 uses the most media space and time for backups. It also is the fastest when needing to recover. To recover, if you can, backup what data files might have changed since the last backup, then re-image your system using the backup image and copy back the latest files you might have saved, if needed.
Approach 2 uses less media and time since it only backs up data. Recovery is a longer process, since you will need to reinstall the OS and all applications, and bring patches up to date, etc. Then you restore data files from the backup.
Approach 3 uses less media and time than approach 2 since you start with a full data backup, and then only do incremental backups, only saving new or updated files. The recovery process is like approach 2, but the data restore will take longer, since you must restore each incremental backup sequencially since the last full data backup.
Approach 4 is a mix of the above approaches.
Which method(s) you use should depend on how you use your system, the criticality of the data, how much data you store, how often it changes, and what your risk tolerence is for downtime and data loss, balanced against the time and effort of making backups.
Try to create a process that is as simple as possible, so that you will actually do it !
For me, I always capture a disk image after building a clean system up and getting all the software installed, or any time there are major changes to the configuration or installed software.
After that, I back up data (full backups), since it doesn't take that long, and it's the simplest procedure for me. I don't have that much data stored so the media size isn't that dramatic an issue. If I had a terabyte of movies, music, etc. I would take a different data backup approach.
I've tested an image restore to a different hard drive and was able to bring the system up. I've also tested data restore, again to a different hard drive, so know that the backups work. Doing these tests if you have a notebook might be more difficult, but then again the risks are also higher with a portable computer.
Hope this helps.. with all the nasty virus and rootkits out there these days, you really need to plan on being able to restore your system from scratch should the need arise.