I use Paragon Backup, it's free and it works well. Download Paragon Backup & Recovery 10.1.19.16240 - FileHippo.com
If you do use it make sure you pick the correct drive to back up.
I just spent, an hour only to find that I had selected the C:\ drive, but it changes the letters when it displays them, so C:\ was really D:, and I wanted to back up F:\.
(I should have remembered that, but I was in a hurry, so it took me twice as long).
So look at the name of the drive, not the letter designation, i.e. my C:\ drive is named Windows 8.
But it works, and it runs from a DVD so you can backup and restore your computer without booting into it.
As for using the Windows backup utility, I'm pretty sure there is a step that lets you tell it what you want to back up.
You may be running into problems because when you switch logins from one OS to the other it also changes the drive letters.
If you log into Windows 8 then that will be the drive that appears as the C:\ drive and visa versa.
Here's a tutorial, I notice that there is a place where you click, Create an image of drive C:\.
That may be where you are running into trouble. How To Use Backup and Restore in Windows 7