If you recall on Windows Backup in Windows Server 2008 R2, you need to backup the entire volume. Same goes when you restore. Therefore it is not a good tool to backup Virtual Machine.
However, during my testing on Windows 8 (Windows Developer Preview), i have realize that you can now backup individual Virtual Machine by using Windows Backup.
Here is the snapshot when selecting Virtual machine:-
Host component - backup Azman, Resource pool configuration
Child Partition - Online backup when the VM is running
Saved State - Slight downtime when backup guest VM which does not have VSS provider. Example:- Some Linux distro, Windows Server 2000 or NT. The VM will be Saved State when create a copy of backup. That's why a slight downtime when backup these VMs.