My goal is to be able to physically replace the internal 80 GB hard drive when/if it fails with my 160GB external hard drive and continue to function as if the internal hard drive never failed. The internal Local Disk [C:] is 15.6 GB in size. The external hard drive has two partitions of equal size and contains my daily backup of the Local Disk [C:] that is 8.59 GB. Is the backup compressed? I am using the "Acronis True Image Home" software program to perform backups. What is the best way to achieve my goal? How do I replicate the current internal hard drive to allow an exchange of hard drives if the internal hard drive fails?

All mfrs. provide software with the new their retail drives to do what you want, also can also be downloaded from their websites.

The images you are creating are for the OS partition only. Because you have a Dell computer you probably have a hidden partition at the front of your harddrive that contains all the backup files to restore your system, should you need to. You need to CLONE the original drive to the 160GB making sure that the hidden partition is also cloned in the process. Follow response #1 for cloning software. I highly doubt you will be able to run Windows from that external drive. The best you can hope for is that you will be able to restore your installation to a new internal HDrive. As I stated you aren't currently backing up the hidden partition and I don't know that your software is even capable of doing that. Without the hidden partition I don't think you will be able to restore your system to factory condition, should the need arise. What you really need to do is install a second internal HDrive and clone the original to the new. Then if you wish, you can disconnect the new drive but leave in the case. If the worst happens you should be able to change jumpers on the drive and reconnect. Then you would need to perform a restore of any files created after the point of cloning. You would perform that from the External drive. When first receiving your computer you should have created a restore set of CDs. Have you done that?

Thanks for the comments. I learned that the Acronis software provides cloning as follows: "All partitions from the old hard disk will be copied to the new one and make the new hard disk bootable. All partitions will be resized to fit the new hard disk. Note that you have to remove the old hard disk when data moving is completed" I do have a restore CD.

If that truly is the case with the hidden partition you still aren't going to get XP to run from an External drive. That is by MS design. You indicated you are performing backups. Backups only backup what you can select for backup. The hidden partition doesn't show so you can't select it. Cloning and backup are different functions.