I have tested it. It works in the same way as the Vista DVD, i.e. boot from the disk, choose ‘Press any key to boot from CD/DVD’ and Vista will start to load the Windows files. Select your language, time/currency and keyboard then click ‘Repair’ in the bottom left corner. Within the repair option there are five choices: Startup Repair, System Restore, Backup Restore, Memory Test and Command Prompt.
An added bonus is that the 32-bit version can be booted and run against an XP installation, e.g. chkdsk.
In Vista SP1 beta there was a program named recdisk that created a recovery disk but it failed to appear in the RTM version. The program is still in \system32 but has been made inoperative.