The WIM format in Vista
The image format used under Vista is file-based, and is called the Windows Imaging (WIM) format. Being file-based, the images can be applied to a partition non-destructively. Thus during deployment, the user state can be saved locally instead of on a network server– which will reduce network traffic while deploying the OS. During deployment you may create an image file that contains the contents of either a single disk volume or a partition. Thus to capture a system with multiple partitions, you would need to create multiple images. However, all these images can be stored as a single WIM file, since the WIM file format supports multiple images per file. The WIM file format also supports single-instance storage, so duplicate files (even from different images) are automatically removed. Thanks to this and compression, WIM images are smaller than images created by other tools. But the compression and other processing takes some CPU time while creating the images. The tradeoff is thus of smaller size and thus less bandwidth consumption over a network versus worth the extra CPU cycles spent on creation.
Finally, you can also mount a WIM file as a file system, which can be then read and modified as it works like a normal removable drive.