Windows Vista and 7 have a few different options for recovering your system in case of a catastrophe.
The root folder is called WindowsImageBackup with a folder named your username inside.
Mount VHD
Open your start menu and right punch computer and then open manage.
In computer management tap on disk management on the left side.
kick off the action menu and select attach VHD.
Note: It looks like you need Windows Vista Enterprise or Ultimate to have this option available.
Check out the link below to mount a VHD in Vista Home or Business.
Browse to the VHD file inside the backup folder that was created earlier.
A new drive should show up in disk management using the next available drive letter.
Browse the files and copy any files you oughta recover to your C: drive.
Then select detach VHD to unmount your backup file.
VHD Attach
Attach VHD files in Windows Vista with a double click