Full backup images are just files in the final analysis, albeit very large ones. You can put them anywhere that you want. Your latter suggestion is the best; just create a suitable folder structure on the external hard disk and store your backup files there. You will not want to have more than one SZ; that will lead to problems. It's your choice but if you have an external hard disk then there is no need for a SZ on your laptop's internal drive. Think of it this way -- if your laptop's hard disk were to fail someday then you would lose your backups that are stored on it in the SZ. Better to have them somewhere else, right? Having said that, redundancy is not a bad thing so it is even better to have them in more than one place. Just don't rely on the SZ as your only backup solution.