An image is an exact copy of the hard drive state. So when you restore from an image it will bring your system exactly back to the state it was in at the time of making the image. Including OS, programs, software, documents and any bad parts too as it is an exact copy of that point in time.

I don't have any recommendations of a free imaging software, maybe someone else could post one. Here are a couple I know of.
DriveImage XML Backup Software
Drive Snapshot - Disk Image Backup
Complete hard disk recovery solution, backup, drive copy, clone and image computer software