system restore is actually VERY effective, I had some issues with windows not wanting to place nice with driver updates, and every time I had to use 'Last Known Good Configuration' which is a type if system restore. Additionally, every time windows updates are installed, an automatic system restore point is made. There are programs out there that can track down these restore points, and remove them for you if everything is working fine, in order to free up space.
Other than that, I have no experience using the system backup/restore utility that comes with windows, as I really havent had a need.
I've used it effectively many times. I just monitor C-drive where Windows is installed. On XP, you can naually create or set it up to do it in auto.
Wondering why it hasn't worked for you?
I still use and really like XP on my old Rig.