Let's suppose your external hard drive is empty. The first system image you create with the built in Windows 7 imaging tool will automatically be called WindowsImageBackup. If you want to store multiple images you can simply rename this first WindowsImageBackup to something distinctive like WIB-011511-InstalledAdobe. The second image will now be called WindowsImageBackup. On your external hard drive you will see two entries:
WIB-012511-InstalledAdobe
WindowsImageBackup
If you create a 3rd system image and leave the external hard drive exactly as above, the 3rd system image will over-write WindowsImageBackup. If you want to save the second image it too must be renamed to something like WIB-062611-InstalledJava. Then you can create the third image and your external drive would look like this:
WIB-011511-InstalledAdobe
WIB-062611-InstalledJava
WindowsImageBackup
Now let's say you want to restore your computer back to the very first system image. You would have to rename WIB-011511-InstalledAdobe back to WindowsImageBackup. Since the third image is also name WindowsImageBackup you can either rename it to something distinctive or, during the restore process you can select which one of the WindowsImageBackup files you want to use. Personally, as soon as I create a system image I immediately rename it so I can remember what prompted me to make the image in the first place. Hope this helps.