When you use the Cloud Control Panel or the Cloud Servers API to create an image of one of your servers, you get a copy of your server's system disk. The image does not include any server state stored in memory, and for flavors that contain more than one disk, it does not include the data disk or disks. Thus an on-demand image is not really a server backup; it is more of a template that you can use to create other servers just like the one you already have.
When you create an on-demand image of your server, ensure that any running applications have their states saved to disk before you create the snapshot. Otherwise, these applications might not start correctly when you boot a server from the image. The time that such applications should be quiesced is fairly brief and can be monitored by observing your Cloud Server's task state. For more information, see Using Task States with Server Imaging in Rackspace How-To.