Your half-remembered information is a tad tangled.
There is a variety of software that will make a snapshot of a whole drive (or partition if you have made a division of a HD).
This can be stored on another drive as well as anything else you wish to store on that drive.
When you "restore" this image it will overwrite everything on the "target drive."
So you need to have somewhere (your secondary HD?) to store that image, but do remember that the important drive you make an image of could at the moment be up to 160Gb in size!
Clearly, if you are going to backup your OS and main applications this way you need to keep that vital drive down to something more manageable say from 10 to 20 GB.