Why a software company would write a program that would put a back-up on the same physical drive is astounding to me.
Exactly. This is total nonsense. The first thing I always do when I get a new PC is to delete all partitions and install a clean version of the operating system from my own CD. That's just the easiest way to get rid of the manufacturer's adjustments and all the bundled crap I don't ever need.
I make one fairly large partition for the OS, allowing for it to double in size and then about 20% more.
I then make a data partition or two for music, my files, etc.
That way, if I have to recover, I usually find my data untouched by a system reload.
I was never a big fan of the manufacturer's image, but sometimes they include good stuff, like MB management (fans, power, etc) and keyboard controls, like an external volume control and mute button.
Windows updates will bring some of that back if you remove it, but not everything.
A good backup is always on a separate physical hard drive in case the actual drive decides to take a dirt nap.