Hi,
The ASR (Automated System Recovery) tool has to have a floppy disk for restore purposes. The best option, if you really want to use ASR, is an external USB floppy as chrisamiller suggests.
You can also follow this procedure to create the ASR files without the floppy, and then copy them to another location to create a floppy or, if you are lucky, your PC can boot from a USB key (I have never tried to boot ASR to a key, not sure if it will work or not but it might be worth a shot):
"You can 'trick' the ASR into running without a floppy drive. When it gets to the point where it writes to the floppy just cancel it. It writes two files, which are used for recovery, to the Windows\Repair directory. After you complete your ASR copy these two files (asr.sif and asrpnp.sif) to a network location and then make the floppy elsewhere. Make sure that you update your floppy EVERY time you do a new ASR or your backup will be hosed.
Or, you can use a USB floppy. This is sometimes the only option, especially if you need to install SCSI or SATA drivers during the recovery."
a. When you start Backup, it might be in Wizard mode. Follow the link for Advanced Mode.
b. Backup tab.
c. Click on the box next to the disk drive you want to back up so that it has a blue checkbox.
d. Backup media or file name: Browse.
e. Select a new filename on your CD.
f. Start Backup.