Windows 7: How and what to back up when reinstalling Windows 7

It's been a little over a year since I last installed Windows. I decided it was time to perform a clean installation. I just got my computer last year and I've never done it before. I have 2 hard drives, each 1 TB. My primary hard drive is partitioned. The first 882 GB is the Local Disk. It has everything on it, the OS, programs, data, etc. The other 48.8 GB has the Windows 8 pre-release installed on it. My secondary hard drive is used for backup. I use the default Windows backup program. I'm currently performing a backup and I plan on creating a system image after that. Once those finish, I'm going to partition my primary hard drive again for the new installation. How much space do I need to give Windows 7 on a partition?

I was also wondering what to do after reinstalling Windows. Do I restore from the system image? I thought reinstalling Windows then restoring would defeat the purpose, wouldn't it? Also, what do the backups and system images cover? Should I just manually copy my programs and data to the internal backup hard drive? I just that that moving programs from where they installed then moving them back might mess some things up. I read somewhere that it would be smart to reinstall all programs. I wouldn't mind doing that, but there's one that concerns me. I'm a PC gamer and I use Steam. My Steam folder is almost 200 GB, please tell me I wouldn't have to download all my my games again...

Well that's it for now, I can't think of the other questions I had. Basically I need a simple step by step tutorial on backing up programs and data and reinstalling Windows. Thanks!

Let's just cover Win 7 partition size and Steam for now.
Here's what to do with Steam.
This is how I did it.
https://support.steampowered.com/kb_article.php?ref=7418-YUBN-8129
Put your games on a different drive from your system drive.
Do that before you touch your system drive.
Consider your games to be data and back up data separately from your system.
Here's what I suggest.
Make sure you've backed up needed data to your non-system drive.
Partition your system drive with a 100gb partition for Windows 7.
Then install Windows 7. Let's call this the C: partition.
Can't say what to do with the Win 8. I'd delete that partition myself, as I think having 2 OS's is a needless complication.
Install the apps you normally use to their default location in the Win 7 program directories. Tweak your desktop as you like it.
Immediately use Macrium to create an image of the C: partition.
You can find how to do that on this forum. You will burn a CD using the Macrium WinPE ISO download whs has provided. It works.
Put an image to 2 places. The non-system drive and for now the other partition on your system drive. Think about getting an external drive for the second copy in the future.
The images won't be big, about 15-30gb depending on what you install for your normal working system.
We can bat this around, but that's a basic start for you.

The way I have mine setup is a 100 GB partition for Win 7 and programs. You would put your data on a different partition. If you have a lot of games, you might consider putting them on a different partition with your data (letters, pictures, music, etc). I would use the other HDD to put your backups on. Get a copy of Macrium Reflect FREE Edition - Information and download It is a great free program that you can schedule to backup your HDD when ever you like. The program does backup your whole partition each time it does backups so you have to delete the older ones every few weeks. == Your question about what to do after you clean install Windows, don't do anything except backup your newly installed Windows and data partition. You are then good to go. You will need to backup both of your partitions. The one with Win 7 and programs and also the one with your games and data. Just set Macrium to install both partitions and it will backup what you need. In answer to your questions, everything is backed up. I doubt if both HDD would corrupt at the same time. This way you will have a complete set of what is on your PC. Some suggest it better to use an external HDD for your backups, but that is up to debate. Let us know how things come out.

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