Windows 7 has great new backup fatures in the business (professional) editions such as the ability to backup an image of the drive, in addition to file level backup. The best practice scenario is to do both, but with image backup turned off (unchecked) in the file level scheduled backup settings. Manually creating a backup image helps to mitigate risks associated with imaging an unstable system.
The new Win7 library feature allows you to add drives or folders to the library index but we have seen problems causing backup errors with reparse point folders added to the library. Win7 does not traverse reparse points but nodes added to the library as an added library item will be traversed. If you experience backup failed errors look in the library list in Windows Explorer and uncheck any added folders or external drives to test if this is causing the issue.
We have also seen backup errors occur when a folder container with music or videos is stored outside of the system designated music or video folder, such as on the desktop.