I'd split the files to 700MB, and use no compression. Make sure the image creation parameters are right, on some versions you could exclude system files - obviously you don't want to do that.
The next stage is by substitution I think. For example you need another USB drive to test the backup run. If you don't have that, then how about to DVD or CD even.
You don't give any info on your set-up, for example if you're running Vista and RAID then we can only pray for you... Or, are you running that pesky ICH9 RAID controller chip?
