There is even newer technology out there that better complements disk imaging, and that is "Point-in-time" real time snapshots. In my experience, people don't like to down or even "Pause their VM" to take a snap shot of their system image since that takes time. More often than not, people get lazy and never bother to keep their system images up to date. This is true whether you virtualize or not.
How ever, to truly have a non-intrusive and constantly protected server, the answer is "Point-in-time" technology. In my business of selling Notebooks, "Point-in-time" technology is red hot. The ability to roll forward and back to any incremental state is an extremely effective solution. Unlike Windows XP's system restore, a utility like PowerQuest V2i Protector 2.0 Server Edition covers you even if the system does not boot. I've gone as far as deleting NTLOADER and BOOT.INI just to test if the PIT products work, and indeed they work like a charm. I already hinted at this in the article but I didn't have the space to elaborate. But the basic strategy is, take a base image and manage all deltas hands off in real time after that. No need to manually do a cold image off a hard drive or pause your VM to copy that 8 GB "vmdk" file. We all know how reliable humans are

, because given the chance to "forget to backup that image", they will 99% of the time. Even if you don't mind coping that 8 GB file every day, you can't beat the ability to roll forward and back to any hour in time. PIT is the wave of the future for not only Data, but OS and Application as well because it make eminent sense. NetAPP uses it for data, PC makers use it to make end-user's lives easier, Windows 2003 has shadow volume, and the list goes on.
Bottom line, the key is to have a base image and maintain PIT deltas after that.