Windows 7 has it's own built-in imaging tool. Backup Complete Computer - Create an Image Backup
Some folks find this tool to be very limited in what it can do so they use other free imaging programs like: Macrium Paragon EaseUS Todo
And still others use the paid versions because of even greater versatility.
One scenario is to do a clean install of Windows 7, install an anti-virus suite of choice, and then install all Windows Updates. Once that's been done, make a system image and save it to an external hard drive. Install any other programs, applications, etc that you use and make a second system image. Then, set up a schedule that suits your needs for additional backups of only new user data and a schedule for additional system images.
I think most people recommend saving backups and images to an external hard drive just because they are more reliable than disks, they have a greater storage capacity, and in the long run it's cheaper to buy a 1TB external hard drive that an equal number of DVDs ( about 225 DVDs that are able store about 4.5GB per disk.) Also, if one disk fails to burn properly the entire set of backup or image disks becomes useless.