The way I got around this problem was to DRAG COPY the Hard Drive icon to a JAZ drive. Then I burnt a CD of the Jaz Disk. Now, when I have to restore, all I do is reformat the drive, drag copy the hard drive icon to the newly formatted drive, open the "Macintosh HD" Folder, select all items, drag them to the new hard drive, and then trash the "Macintosh HD" folder. Upon reboot, everything works perfectly.
If I had to do it again, I would call the dragged image of the Hard Drive "MASTER" or something else, so it won't be as confusing with the new Macintosh HD.
If you have any questions you can reach me directly at SFVteacher@aol.com