|Windows State State Backup||Windows System Backup|
| A Windows System State backup only makes a backup of the machines registry setting, Active Directory (if it's a Domain Controller), boot and system files etc. |
Please refer to the following Microsoft article for further details http://technet.microsoft.com/en-us/library/cc938537.aspx
| A Windows System backup apart from containing all the information of System State backup, will also include a full image of the disk including the MBR (Master Boot Record). This type of backup will allow for a bare metal restore.
Please refer to the following Microsoft article for further details http://technet.microsoft.com/en-us/library/cc753528.aspx