1. There’s nothing wrong with having one big HDD for all your storage,
IMO. The only real drawback is that it only takes a single drive failure
to lose all your data, but since you’re planning to do regular backups,
that’s not a big issue. These days, HDDs are certainly big enough
there’s just not a need for multiple drives to build up storage
capacity. Plus it’s just easier to deal with – fewer cables, don’t need
lots of drive bays in your case, etc…

2. Imaging is the best choice for what you want to do. Imaging software
has some advantages over just doing a simple “copy & paste”. Imaging
software will gather all data on the drive (including hidden files and
things like that), it can easily exclude things that you don’t need to
backup (page file, hibernation file, or other paths you might be able to
specify), image archives are easier to manage, and image archives will
typically take up less space since the archives are compressed and can
also use Incremental/Differential methods to backup just the changes.

3. Absolutely, practically all disk image products will be able to
backup and restore the OS since the boot info stays intact with the
image of the OS partition. If you have to restore the OS, normally you
just use a boot CD that you create within the disk image software. Also,
with some imaging programs, you’ll have the option to add drivers and
things like that to the boot CD so I’ll even work with RAID setups too.
And there should be no problem if you’re using a USB backup drive. With
USB 2.0 it’ll be quite slow to do a backup (USB 3.0 or eSATA are much
better for this if you’re using external storage). Regardless, USB
drives should be no problem. As with anything, just be sure to fully
test out any disk imaging software you try (including the boot CD!!).

I hope this clears a few things up…just post back if you have any more questions!