The easiest thing to do is to is to use a utility like DirectCD, and format the disk. That way, instead of "burning a CD" as a backup method, you are "backing up to a backup file".. that file can be on the DirectCD disk is simply a Rewriteable in your burner drive.
The DirectCD-formatted CD is treated like any other hard drive, network drive, or floppy drive. Once the system recognizes it, it will allow you to read and write to it like it was a floppy.
hmm.. that's odd... can you copy regular files onto the cd?
another way to do it is to make a scheduled task to run this command:
c:\winnt\system32\xcopy.exe C:\*.* E:\ /A
Nothing = Normal, leave it marked as changed
/A = "Differencial Backup" - copy anything changed, leave it marked as changed
/M = "Incimental backup" - copy anything changed, mark it as not changed
/E = copy everything, incl. subdirectories, and empty directories
/V = verify files
/C = continue even if errors occur
/I = assume destination is a directory (and not a file)
/H = copy hidden and system files
/R = overwrite read only files
/K = copy attributes
/O = copy ownership & permissions (good if you are duplicating an NTFS volume onto another NTFS volume, useless for backups to CD's)
/X = copy audit settings (useless for backups to CDs)
/Y = dont' prompt (automated)