Refresh Backup Plan?

From time to time I do a refresh of my computer (a HP TouchSmart 600). Recently I upgraded the TouchSmart software from version 3 to version 4. This process took several hours. The next time I do a refresh I plan to follow the following plan so as to save time during future refreshes by restoring the C drive to the condition shown after step 3 below.
1. Uses the System recovery (Recovery partition) to refresh the C drive to the factory condition.
2. Upgrade the TouchSmart software to version 4. This takes several hours.
3. Install TrueImage Home 2011.
4. Do a backup to a USB drive.
Now the questions. Which of these two is best? Suggestions welcome.
1. Create the backup as a Disk Image. Using a USB drive for just this purpose.
2. Create the backup as a File backup. Using the backup as the starting backup for a weekly backup. Using this method would I be able to restore the disk back to the condition after step 3 above?


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