New
#11
The System partition is more or less similar to the new System Reserved boot partition seen when using the 7 dvd's drive tools to partition a drive when performing a custom install of 7 onto a new drive or one that's been wiped completely of everything.
For creating and storing a full system image backup of the main drive the way it is you only have the one main drive and would need to have either a ton of blank dvds for a multidisk session type backup or an external hard drive plugged into a usb port if not an external enclosure to place a second drive in. Or you would need a network location to store the image made.
As for as custom installing ubuntu to the same drive without help of something like the Wubi boot loader the ubuntu installer will replace the 7 mbr with the Grub loader automatically. Some would prefer running any distro on a VM rather then trashing the Windows boot sector to simply run it as a file on the drive. A VHD(Virtual Hard Disk) is another thought to consider.
Here I simply custom installed Linux Mint Debian a much larger Debian based distro on a 32gb flash drive and can boot it from any machine. Put a 4.5gb root partition as a second partition and the rest formatted to NTFS to make up a live data recovery stick. Grub installed to the flash drive however not the main drive. The second root partition is assigned as the mount point "/".