Yes, backup software has a feature called "bare metal restore" that utilizes the "Windows System Backup" functionality in Windows Vista, 7, and 2008 server. With this option, backup software creates a mirror image of your entire server to a local disk such as a USB drive, and then we backup that image off-site. If you were using this feature and needed to restore the entire server, you would simply boot up the server with the operating system CD/DVD and restore the entire server just as it looked the night before (or whenever you lasted backed up). This is a very cool feature and saves a lot of time in a disaster scenario, but of course it will increase your monthly storage capacity.
If you are not using Windows 2008, you can still utilize the bare metal feature if you are using the popular StorageCraft ShadowProtect software. backup software integrates with that software if detected on a server, and it takes on the same type of process as above.