First, I tried the System Image support in the built-in Windows 7 Backup.
There are two modes in Windows 7 Backup -- regular and system image:
A system image is an exact copy of a drive. By default, a system image includes the drives required for Windows to run. It also includes Windows and your system settings, programs, and files. You can use a system image to restore the contents of your computer if your hard disk or computer ever stops working. When you restore your computer from a system image, it's a complete restoration—you can't choose individual items to restore, and all of your current programs, system settings, and files are replaced with the contents of the system image.
I took the system image backup to an external USB hard drive, and that worked great!
What didn't work so great was restoring it, unfortunately ...
- The Windows 7 system repair disk creation tool only supports creating a DVD/CD, and this laptop has no optical disc support. Would be nice if this tool supported USB keys! I found a workaround to generate a bootable USB system repair, though.
- The showstopper -- the drive I installed is a smaller hybrid HDD (5,400 rpm 500 gb drive, replaced by 320 gb 7,200 rpm hybrid drive) and the Windows 7 system image restore process barfs when you try to restore a system image to a smaller drive -- even if there was more than enough space for the actual data! Lame.
The Windows 7 backup tools were better than I expected, but they have some limitations I wish I had known about ahead of time!
I had to abandon using Windows 7 backup for my needs, it was close but no cigar. Documenting it here for others to find. It might work OK for you as long as you're installing on a laptop with an optical drive, and you are installing a LARGER hard drive.