I think your concern is that it will create a literal clone of your system and put that on a drive, which is not the case. An image file is similar to any other file type, it will merely create a new file path as nixda indicates above.
The below is quoted from a forum thread about Acronis (a popular imaging program), and explains the technical details better than I can.
True Image works by taking the raw bits on the platters and working with them - it doesn't care about filesystems, that has nothing to do with it as most people don't understand. It doesn't care if it's an NTFS filesystem, FAT32, FAT, HFS+, Ext3, etc. It's not relevant because all it does is see a partition that starts at bit and ends at bit and then it goes to work on the content from to . It looks at the sectors on the drive which are 512 bytes long - again, the filesystem doesn't matter in this equation - and then works with the data it finds.
It doesn't image empty space, it just puts placeholders to say "Ok, it's empty from sector to sector so nothing there." If you've got a 320GB hard drive, one partition, with 60GB of data on it, it's already noted the gap from 60GB to 320GB (the end of the drive) and then focuses on 60GB.