It's an advanced backup method. Any backup software can backup all your data. Drive imaging does it all.
The best analogy for drive imaging is making a photocopy of your hard drive. OS, apps, data, Master Boot Record, the whole nine yards. This is the defacto method for upgrading your computer's hard drive without having to re-install everything. It is also the quickest way to restore your computer to working state after hard drive crash or malware.
Imagine your hard drive craps out and have to install a new one. Install the OS, all the apps you were using, download software updates, restore all your data, configure everything - 6 or more hours right?
But wait - you imaged your whole hard drive to another external hard drive recently. Install your new hard drive, connect your external hard drive, boot to USB imaging software, start the restore process, sit back and relax. About an hour later process is finished, reboot. Your PC is in the exact same state it was at the time you made the image, almost like a time machine for your computer. Too easy. I have been imaging all my computers since DOS 5. I have also used drive imaging in corporate PC deployments. You buy several hundred PCs with the exact same hardware configuration. You install/configure the needed OS and apps on one PC then image it after you've confirmed everything works as it should. That image is then cloned to all the other PCs over a LAN/WAN. The only difference is for mass cloning there is always a per user customization that occurs afterwards in the form of scripts.
Here is some good info on cloning XP.
https://lockergnome.com/2012/06/26/three-free-ways-clone-windows-xp-2012-follow-up/
Since you're new I recommend you try it on a test PC. Make an image, erase the hard drive, then restore it from the image you've made (a backup is not a backup until you've successfully restored from it).