It's OK to backup by copying User folders or named User Account folder, however to copy the files back in, open each individual User folder (Docs, Pics, Music, Downloads, Desktop, etc), from the Organize tab Select All, then drag the group to the corresponding User folder in the Explorer bar at left.
Make sure you don't release left click while dragging until the Explorer bar stops unfolding and it confirms in the hypertext your destination folder.
The reason you must do this instead of paste the actual folders in is because these are System Shell folders and the fresh install will have it's own set which cannot be overwritten.. So it's best simply to copy the contents over instead.
Someone else may know a workaround that will replace the shell folders with the ones you copied, but I wouldn't want the hidden AppData folders anyway since these are a corruption path into a fresh install.
Other tips for getting a perfect Clean Reinstall - Factory OEM Windows 7