This is typically done with "cloning" or "ghosting" programs. There's a free one called CloneZilla. It's not the easiest to use though because it boots into Linux first and will make the disk from there. Leo recommends getting an inexpensive external hard drive instead of using CDs or DVDs, though. It will work much better.
There are other commercial programs such as Acronis True Image, which costs $30, and works great for this. Another is Norton Ghost which used to be a standard for this type of thing, but it costs a lot ($70) and probably isn't the best option anymore.
Leo suggests making a disk image with the pre-installed Windows as it comes before making any changes, and another after he makes his customizations. Leo uses an older program called Drive Snapshot to do this. Then he'd have a disk image of the default Windows configurations, and one of his customized programs and settings.