What are you trying to do? Do you want to just back up your data, or do you want to create a fully functional restore image that would put your system back to the exact state it was in when you made the image?
The former is easy, just copy the important data files to a CD or DVD. The backup program included with XP is a holdover from days long before CD/DVD burners existed, and it hasn't been updated to support such. It's basically floppies or a tape drive for that thing.
If you want the latter, you'll need a program such as Acronis True Image or Norton Ghost.
For what it's worth, I prefer simply backing up important data. I figure if something should prompt a format, it's a good opportunity to learn from my experiences up to that point and maybe do a few things differently from before. Maybe a better folder organization scheme or just not installing some set of programs I rarely use. If I use a disk image, I'm locked into my old system unless I want to go to great effort to revise it. Then I either need to make a new image to reflect this change or be prepared to redo all this work every time I need to restore the image.
I tried using windows xp to backup my c: drive and data on d: drive and using DVD disc but xp doesn't recognise it. why I dont know.
Then I purchased Nero 7 to do this operation. I am able to backup my data but not the exact image that is usable when harddrive crashes. And second problem with Nero is it doesn't leave the disk open after writing even some MB of data (or atleast i don't know).Please help.