wow, I haven't heard that one asked since win2k came out!
Anyway, here's the method I use when needed:
To back up a complete system (that you can boot from):
1. Use the MS backup tool (in xp) to back up your NTFS drive and system state. Put the .bkf file on a network drive, tape, whatever.
2. Nuke your NTFS partition and make a FAT32 in it's place. win9x fdisk can do this.
3. Install XP on the FAT32 partition. Don't bother configuring it, so long as you can access your .bkf file from step 1.
4. Open up MS backup and open your .bkf from step 1. Restore to original location.
5. Reboot if needed. Everything is back to normal, on a FAT32 partition.
If you just need to back up some random files, put the files on a CD-RW or network drive or something. That's what I always do.