I am in the process of switching to Windows Server 2008 R2 on my main desktop, for software development and other things. After couple of days going through the installation and setup process I was almost done putting all my programs and settings back, when all of the sudden Windows got corrupted and would not boot anymore. Lukily I had only a few hour-old backup copy of the C: drive, made with built-int Windows 2008 R2 Backup. Should be very easy to restore and pickup where I left without much loss. Or so I thought.
For starters, when I booted from Windows DVD and went to "Repair" area, it didn't see the backup image. It saw backup images of other machines, but not its own. The backup drive was external, so I connected it to another PC and so the backup image alive & well. But when I connected the external drive with backup images back to the box, Windows Repair could not see the image. It looked like I will have to lose two days worth of effort and reinstall Windows. I did that, and as soon as I could login, I checked whether I could restore iamge from within Windows. Sure enough, the image showed up in the Restore just fine.
I installed Windows again on another drive to be able to restore the image on the original drive. I removed partitions created by previous Windows reinstallation on the original drive and restored the image from another running Windows installation on it. I rebooted from the original drive, and restored Windows... would not boot. Windows Server System Restore has loaded the image of system volume on the hard drive, but didn't make bootable! No matter what I tried, I could not make drive bootable. It was terrible. Next day I decided to make the drive bootable by installing Windows on it, again. I did that, booted Windows from another drive, and restored image on the original drive again. To my surprise, this did the trick - after two days of despair and misery I finally got my Windows system backup restored.
So there you have it: Windows System Backup creates images that Repair DVD may not see, and even when you manage to restore it, you system may not boot. It is hard to fathom why Microsoft makes software with this terrible usability.