"Unfortunately, Windows Backup doesn't support CD or DVD drives, despite
Explorer's built-in CD-burning features. The solution is to select File from
the Backup destination listbox, then specify a filename on your hard drive.
When the backup is complete, drag the file to your CD recorder, and burn,
baby, burn!"
" Microsoft Backup does not inherently support CD and DVD writers. But if
you install aftermarket "packet writing" software (such as Roxio Drag to
Disk), all your applications (including Microsoft Backup) will be able to
write to your burner as though it were an ordinary hard disk.
Keep in mind, however, that packet writing software, however convenient,
does have its drawbacks. First, this is a bit of a kludge, and as such,
should not be relied upon as the sole mechanism to safeguard your data.
Second, discs written in this way will not be readable in all drives.
Finally, packet writing tends to be slow, and backups performed in this way
take longer than the solution described in the article. "
Save and Protect Your Hard Drive
http://www.pcmag.com/article2/0,1759,1757683,00.asp