The conclusion is that NTBackup, until a more formidable free one comes around, is still the best backup utility. What you need to run this in Windows 7 has been documented here and it also mentions that you can safely disregard a warning message box.
However, the disclosure given fails to mention one very important setting you need to turn off. That is the 'Disable volume shadow copy' in the 'Advanced backup options' dialog box here:
Make sure you check this option otherwise the back up will abort with this message:
Error returned while creating the volume shadow copy:Catastrophic failureTest of backing a program while still in use seem to be unaffected by this option.