I'd like to make a backup/image of my machine, so that I may install it if i ever need to. What I mean by image is a snapshot of all of my programs, settings,files, everything, i think this is referred to as a ghost image. I want to be able to restore so I do not have to reinstall everything again. Does the backup/restore utility in Windows Server 2008 R2 do this?
Yes, it does.
FYI - Ghost is a specific application made by Symantec that makes image-based backups. A Ghost image is one that's been created by this application. An image-based backup is the generic cross-product term for it.