I do much the same as you suggest, Anna, with one difference. I use an 
external USB drive.
I know that it is slower that your method but it does allow the backup 
to be stored off site in a safe place. I find setting the backup to run 
over lunch time does not interfere with when I need to use my computer.
As for backing up to a file, by running the backup from a DVD, I can 
have the whole process automated. I use 3 DVDs to backup to 3 different 
files.

Orf

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