Imaging your system drive is the most complete way to back up a Windows 7 system, but it's far from the only way.
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Vista's full-system and crucial-data backup / restore system followed something of the same pattern as many other features introduced in that OS: the idea was sound, but the implementation really bothered a lot of people. Doing something as simple as backing up or excluding specific folders, as opposed to whatever arbitrary folder selection chosen by the program as "important," wasn't possible.

Backup in 7 seems to fix most of those issues. The single biggest and best feature -- full-system imaging -- is still here, of course, and the variety of backup methods ought to please everyone. If you have more than one hard drive, for instance, a common backup scenario is to make a live image of your system drive to your secondary drive and keep it updated. The real beauty of the backup system is that you can work uninterrupted while a backup is being made (apart from, say, needing to change blank media if you're burning to discs or something of that sort).

One gripe that might surface here: at first glance, it looks like making a system image is the preferred backup method. The only way to get to backing up and restoring individual files or folders is by going through what looks like the steps to create a full-disk image backup. For first-timers it might create the feeling you can't make anything but a full-image backup.

Defrag

You'd have to search far and wide to find someone who actually liked the stripped-down interface for Vista's defragmentation program. Part of that was meant to reflect the new way the defragmenter worked: it was designed to work in the background, with minimal babysitting from the user. But people wanted the defrag program to give them some information instead of nothing, if only because the black-box approach seemed so contemptuous of the end user.

To that end, the Windows 7 defragmenter offers the end user a little bit more info. You can obtain a drive's fragmentation quotient on the spot, or perform a defrag directly in the program and see a bit more detail about the progress of the operation. You still won't see a graphic map of the disk, but the only people who seem bothered by such an omission are the folks who micromanaged their systems to begin with. And since most of the effects of fragmentation are mitigated by having at least 30% free space on a drive (quick, how much free space is on your C: drive?), defrag's best consigned to the status of a silent background maintenance task anyway.

If you're still determined to do it yourself, you can always run the defrag command from the command line interface (be sure you're in admin mode), or pick up any number of third-party replacements (my favorite: JKDefrag). Just don't kid yourself about how much of a performance boost you'll get from defrag alone.