So here is stupid me----no Recovery CD

Nope. And you wouldnt want to recover 20 Gigs either. Takes hella time, and give you only a lot of games you are tired of. Make sure you have a proper backup of all your files. Burn these on DVD or whatever, and youll be fine. I take it you still have a restore CD? If so, you can just reinstall XP if it crashes. If the restore CD is just a file in your C folder, you may want to make sure you have this one backed up also, as if your C drive crashes, you have lost even that. NTFS is fine. Its supposed to crash less than FAT32, so dont listen to your friend. If all of this bothers you, make sure you have all the backups and do a reinstall.

Acers come with a "hidden partition" located at the physical beginning
of your HDD. This partition contains about 4GB of data including your OS
install. E-recovery accesses this partitions data when you use it to restore
to factory. Check your documentation. You are supposed to be able to restore your original installation using e-recovery but I read that your
drive needs to be in the original Fat32. Again read the documentation
or check Acer's website. When new Acer's nag the daylights out of you to
create a restore DVD. Acer uses the hidden partition for this also. I have used this DVD to successfuly restore to factory. It is a little quirky but works well. Of course if you have removed/deleted/modified this hidden partition.....

What you were attempting to do was image what you have on your C: drive
after installing programs etc.

The hidden partition was created using an old PowerQuest program
I believe the D to D imaging program is an old PowerQuest utility also,
part of a suite.
They were both written before NTFS became wide spread hence Fat32.
I am not 100% sure about this but it makes sense to why the cheap bastards
at Acer would hobble XP with Fat32. After all they can't even burn a simple DVD restore disc to include with their machines.
Instead they depend on the end user to do that for them.
It isn't just Acer most companies do this nowdays.

I bought a retail XP Pro CD when I purchased my 5672 anticipating
such crap and very soon after making my restore DVD I wiped my entire
drive including the PQ partition and installed XP Pro and the needed drivers
from Acer Euro website (more up-to-date). Haven't look back since.
As I said earlier I did test the DVD on a spare HDD, worked great.

Call Acer and see if they will send you a restore DVD.

you should be able to burn them.

on mine. (before I loaded retail version)

alt+f10
brings up recovery thingy
log in with the six zeros (000000)
choose recovery actions (me thinks)
burn backup
choose factory default

give it a shot. it might be worth it.