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Your probably right the smaller drive may be the way to go, it will save some money.
OK; pretty much your choice. The price difference isn't a lot. You just have to gauge how fast your total space requirements will grow. I'm guessing under 10 GB a year, which makes 500 GB pretty tough to justify.
I don't quite understand your question (Are you making an image of System Reserved as well as C?)
When I make a Macrium image I select C: and image that whole drive.
C isn't a drive.
It's a partition.
Maybe it's the only partition on the drive. Maybe it isn't.
Analogy with a carton of cigarettes:
The outer carton is the drive. The individual packs of cigarettes are partitions. The individual cigarettes are files and folders. You can have a carton with 1 huge pack or a bunch of smaller packs. The carton alone is pretty much useless.
Do you or don't you have a System Reserved partition?
If you do, it almost certainly contains your boot files and would be have to be imaged if you want to restore successfully.
If you don't, then your boot files are elsewhere, probably on the C partition. In which case, you would need to image C only.
So---you should post a screen shot of Windows Disk Management so we can see what's going on with the current installation---or at least look at Windows Disk Management yourself. If you have a System Reserved partition, it probably is flagged as "system" and "active". Yes or no?
You can certainly make ONE image file containing BOTH C and System Reserved. Maybe that's what you've been doing. I don't know. But you say "I select C", which makes me wonder.
If I understood partitioning and how program files were stored better, I would like to be able to partition just enough space on the primary drive for the Win7 OS, then have additional programs and data stored on the remainder of the primary.
That's rarely a good idea. You rarely would want to put programs and Windows on separate partitions---particularly in your situation where space is not an issue.
It MIGHT be a good idea to put Windows and all programs on C and all data on another partition on the same drive, but it's NOT necessary. It would make your C images smaller since C would have no data files. That's a slight advantage.
And if your C partition (Windows) became fouled up, you could restore just C and System Reserved, not data. That can be an advantage.
Imagine this situation:
September 1: you've got the SSD, with C and System Reserved. Your data is on C somewhere.
September 4: you make an image of C and System Reserved with Macrium.
September 6: you develop a bunch of new data--picture of your cat, whatever. Those pix are on C.
September 8: your Windows installation goes haywire, so you restore the Macrium image from September 4.
Guess what: the pictures of your cat are gone because they were not part of the image you made on Sept 4.
If the pictures had been on a separate data partition, then the restoration of the September 4 image would not have affected your data at all---because all you restored was Windows (C and System Reserved), not the data partition.
You can work around that problem if you had separate data backups made after September 6, which you certainly should have and which is why the separate data partition thing is not required. It's just convenient.
You don't want to make C "just right in size" and then find out 2 years later that it's too small and that can be tough to estimate. Windows grows over time, just through updates.
I could image the partition that had the OS on it separately and it would be like a fresh install if the OS went buggy.
But I don't understand enough about all this to be that crafty, so I just backup everything.
No problem IF IF IF IF you are backing up ALL ALL ALL partitions on that hard drive, not just C.